Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies
We investigate whether top-tier advisors provide superior services by examining the relationship between reputation (measured by whether it is a top-10 advisor ranked on deal value) of financial advisors on the bidder side and stock market-based/accounting-based performance of bidders. Using Chinese...
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
2017
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/20999/1/shsconf_four2017%201%206v.pdf |
| _version_ | 1803628075352588288 |
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| author | Wu, Cen Tang, Qingquan Tang, Jiali Jenna |
| author_facet | Wu, Cen Tang, Qingquan Tang, Jiali Jenna |
| author_sort | Wu, Cen |
| collection | UUM |
| description | We investigate whether top-tier advisors provide superior services by examining the relationship between reputation (measured by whether it is a top-10 advisor ranked on deal value) of financial advisors on the bidder side and stock market-based/accounting-based performance of bidders. Using Chinese listed companies with major assets reorganizations (MARs, M&As with large-scale target), we find top-tier advisors are associated with higher excess returns (CARs), implying that reputation generates a verification effect on investors.But we find no significant relationship between the advisor reputation and bidders’ accounting-based performance post-MARs. The findings indicate that although advisor reputation can attract M&A business and sends positive signal to the market, it does not lead to stronger financial performance in the long run. That is, the so-called top-tier financial advisors fail to live up to their reputation.We also find that payment premium is an intervening variable between advisor reputation and the long-term accounting-based performance of bidders, suggesting that top-tier advisors fail in their duties to help clients achieve greater share of synergy gains. |
| first_indexed | 2024-07-04T06:16:11Z |
| format | Conference or Workshop Item |
| id | uum-20999 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:16:11Z |
| publishDate | 2017 |
| record_format | dspace |
| spelling | uum-209992017-02-22T08:48:10Z https://repo.uum.edu.my/id/eprint/20999/ Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies Wu, Cen Tang, Qingquan Tang, Jiali Jenna HF5601 Accounting We investigate whether top-tier advisors provide superior services by examining the relationship between reputation (measured by whether it is a top-10 advisor ranked on deal value) of financial advisors on the bidder side and stock market-based/accounting-based performance of bidders. Using Chinese listed companies with major assets reorganizations (MARs, M&As with large-scale target), we find top-tier advisors are associated with higher excess returns (CARs), implying that reputation generates a verification effect on investors.But we find no significant relationship between the advisor reputation and bidders’ accounting-based performance post-MARs. The findings indicate that although advisor reputation can attract M&A business and sends positive signal to the market, it does not lead to stronger financial performance in the long run. That is, the so-called top-tier financial advisors fail to live up to their reputation.We also find that payment premium is an intervening variable between advisor reputation and the long-term accounting-based performance of bidders, suggesting that top-tier advisors fail in their duties to help clients achieve greater share of synergy gains. 2017 Conference or Workshop Item PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/20999/1/shsconf_four2017%201%206v.pdf Wu, Cen and Tang, Qingquan and Tang, Jiali Jenna (2017) Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies. In: 17th Annual Conference of the Asian Academic Accounting Association (2016 FourA Conference), 20-22 November 2016, Kuching, Sarawak. http://doi.org/10.1051/shsconf/20173403001 doi:10.1051/shsconf/20173403001 doi:10.1051/shsconf/20173403001 |
| spellingShingle | HF5601 Accounting Wu, Cen Tang, Qingquan Tang, Jiali Jenna Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title | Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title_full | Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title_fullStr | Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title_full_unstemmed | Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title_short | Do financial advisors live up to their reputation: the case of major assets restructurings of Chinese listed companies |
| title_sort | do financial advisors live up to their reputation the case of major assets restructurings of chinese listed companies |
| topic | HF5601 Accounting |
| url | https://repo.uum.edu.my/id/eprint/20999/1/shsconf_four2017%201%206v.pdf |
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