Investment Bank M&A Reputation And Performance Commitment: A Preliminary Empirical Study

In this paper,we use M&A transaction data of listed companies from 2010 to 2014,and explore the mechanism of investment bank reputation in the field of M&A from the perspective of performance commitment level and the degree of realization.The conclusions of the study are as follows: the higher the reputation of investment banks,the higher the level of performance commitments,which is more obvious in consistent industry,non-backdoor listing and non-state owned target group.Secondly,the relationship between the investment bank M&A reputation and the performance commitment realization rate is an inverted U curve.At a relatively low range,the performance commitment realization rate rises along with the investment bank M&A reputation;High performance commitments,which brings difficulties to the implementation,result in realization rates decrease,which is also more obvious in consistent industry,and non-backdoor listing.As an intermediary,the investment bank can alleviate the problem of information asymmetry between the two parties in the process of establishing the performance commitment,and improve the efficiency of M&A market.The conclusions of this paper extend the theory of investment bank reputation to the field of M&A,which has theoretical value.Hiring reputable investment banks can set up high performance commitment level,which contributes to reach an equilibrium among the asset buyers,sellers and investment banks.The empirical results of this paper provide the standard of hiring financial advisors,which is of significance.