Boussard Valérie, Godechot Olivier, Woloszko Nicolas, 2017, « How to make a deal: the role of rankings and personal ties in creating trust in the mergers and acquisitions market », Socio-Economic Review, n° mwx056.
On the mergers and acquisitions (M&A) market, buyers and sellers resort to experts in order to secure deals. But as these experts might be prone to opportunism, firms need to find a way to build trust. We identify two trust devices: social ties and public rankings. We explore whether these personal and impersonal devices are substitutes, independent or complementary. We study the French M&A market through a mixed-method approach. We show that both previous contacts and league table rankings of firms contribute to trust and to making deals. These trust devices are all the more likely to be used if the deal is risky, especially within the sell side (more at risk). We also find that firms tend to make deals only with other firms at the same level in the rankings. Finally, we find some evidence of substitution between rankings and personal ties, especially for low-value deals.
Français | English
OgO: plus ici|more here
[Publications] Godechot (Olivier), Review Symposium: On Brooke Harrington’s Capital without Borders: Wealth Managers and the One Percent, Cambridge MA, Harvard University: plus ici|more here
[Publications] Godechot (Olivier), Horton (Joanne), Millo (Yuval), , Structural Exchange Pays Off. Reciprocity in Boards and Executive Compensations in US Firms: plus ici|more here
Tweets (rarely/rarement): @OlivierGodechot
HOP ! [V. 0.93]
clics / mois.