Conflicts of interest between banks and firms: Evidence from Japanese mergers

Huong N. Higgins

Pacific-Basin Finance Journal, 2013, vol. 24, issue C, 156-178

Abstract: This paper assesses conflicts of interest between banks and their client firms via the merger transaction by examining the wealth gain of merger acquirers who were listed on the Tokyo Stock Exchange in 1990–2004. The paper reports two main findings. First, acquiring firms did not gain from their acquisitions. Second, acquirers with stronger bank ties experienced larger wealth loss than those with weaker bank ties. These results are consistent with the hypothesis that banks played a conflicted role in mergers during the examination period.

Keywords: Merger; Bank; Conflicts of interest; Corporate performance; Corporate governance; Japan (search for similar items in EconPapers)
JEL-codes: G21 G34 N25 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:24:y:2013:i:c:p:156-178

DOI: 10.1016/j.pacfin.2013.04.004

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