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- Title
Banks and Corporate Decisions: Evidence from Business Groups.
- Authors
Higgins, Huong N.
- Abstract
Abstract: Banks who can influence clients' governance may steer those clients into mergers to reduce the banks' own risk. Empirical evidence based on Japan's mergers and acquisitions (M&As) during the country's 1990s banking crisis indicates that acquirers with stronger bank ties made acquisitions that they would not have normally made. These acquirers lost more shareholder value via mergers than acquirers with weaker bank ties. The banks' risk was reduced, while the banks' shareholders gained significant excess returns from their borrowers' mergers. This paper offers implications for corporate governance of firms with strong bank ties and advances the existing knowledge on business groups.
- Subjects
BANKING industry; RISK management in business; FINANCIAL institutions; BUSINESS enterprises; MANAGEMENT
- Publication
Financial Management (Wiley-Blackwell), 2018, Vol 47, Issue 3, p679
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/fima.12214