Journal article
An Empirical Examination of Investment Banking Merger Fee Contracts
Southern economic journal, Vol.56(4), pp.1117-1130
04/01/1990
DOI: 10.2307/1059896
Abstract
Using a sample of 126 US corporate mergers over the period 1979-1985, single and multiple equation models are employed to examine the relationships between investment banking fees and merger gains. The results are consistent with the idea that the standard merger-fee contracts used in the US mergers and acquisitions market provide the proper incentives for investment bankers to improve the quality of matches made in this market. The significant positive relationships between fees and gains and fees and banker effort generated by the sample mergers indicate that the investment bankers are, on average, acting in the interest of their client principals. The findings are consistent with the notion that investment banking merger fees, rather than being excessive in an economic sense, represent fair compensation for the efficient provision of services by risk-averse agents to their principals.
Details
- Title: Subtitle
- An Empirical Examination of Investment Banking Merger Fee Contracts
- Creators
- William HunterMary Walker
- Resource Type
- Journal article
- Publication Details
- Southern economic journal, Vol.56(4), pp.1117-1130
- DOI
- 10.2307/1059896
- ISSN
- 0038-4038
- eISSN
- 2325-8012
- Publisher
- Southern Economic Association
- Language
- English
- Date published
- 04/01/1990
- Academic Unit
- Finance
- Record Identifier
- 9984963236102771
Metrics
1 Record Views