The Effects of Investment Bank Rankings: Evidence from M&A League Tables

Forthcoming, Review of Finance

55 Pages Posted: 20 Jan 2012 Last revised: 3 Aug 2018

Date Written: November 1, 2016

Abstract

This paper explores how league tables, which are rankings based on market shares, influence the M&A market. A bank’s league table rank predicts its future deal flow, above and beyond other determinants of this future deal flow. This creates incentives for banks to manage their league table ranks. League table management tools include selling fairness opinions and reducing fees. Banks use such tools mostly when their incentives to do so are high: when a transaction affects their league table position or when they lost ranks in recent league tables. League table management seems to affect the quality of M&A transactions.

Keywords: League tables, Investment banking, Mergers and acquisitions

JEL Classification: G24, G34

Suggested Citation

Derrien, François and Dessaint, Olivier, The Effects of Investment Bank Rankings: Evidence from M&A League Tables (November 1, 2016). Forthcoming, Review of Finance, Available at SSRN: https://ssrn.com/abstract=1988928 or http://dx.doi.org/10.2139/ssrn.1988928

François Derrien (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France
33 1 39 67 72 98 (Phone)

HOME PAGE: http://www.hec.fr/derrien

Olivier Dessaint

INSEAD

Boulevard de Constance
77305 Fontainebleau Cedex
France

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