Financial advisors and corporate investment

Abstract

China is now the world second largest capital market and mergers & acquisitions (M&As) have taken up a large share of investment. With the rapid growth of China's M&As, the value of consulting business of financial advisors also greatly increased. Understanding and evaluating the role of financial advisors in the unique Chinese financial market can potentially benefit firms, investors and market regulators. This thesis uses Chinese M&As as empirical setting to examine the role and mechanism of value-creation of Chinese financial advisors, specially, I focus on the financial advisors’ external political connections, the reputation, as well as the advisors’ teamwork. My thesis document that political connected, and top-tier financial advisors create value for shareholders, and the underlying mechanism of this value creation mainly from advisors’ ability to design and negotiate better deal term. In addition, small-size advisor team benefits firms and investors because of their lower co-ordination costs. The main results remain hold after addressing endogeneity and carrying out additional robustness check. The findings of this thesis have important implications to academics and practitioner: financial advisors’ reputation, their networks (i.e. political connections) and teamwork do matter in corporate takeover process.

Date of Award	8 Jul 2021
Original language	English
Awarding Institution	Univerisity of Nottingham
Supervisor	Weimin Liu (Supervisor) & Qing-Ping Ma (Supervisor)