This paper examines the role of the social network hierarchy of financial advisory firms in a mergers and acquisitions (M&As) framework. Financial advisors are information intermediaries who play an information extraction and information dissemination role. The more central the advisory firm is within the network of advisory firms, the greater their access to information flows. Our findings indicate that more central advisors are associated with higher acquirer announcement abnormal returns, higher abnormal combined returns and higher operating long-run performance for the new entity. Central advisors also mitigate information asymmetries, resulting in lower premium paid by bidders. In return, more central advisory firms demand higher advisory fees, engage in higher M&A activity and are more likely to advise large acquirers and acquisitions of large and public deals. Our results are robust to endogeneity and self-selection concerns.

中文翻译：

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社交网络和财务咨询公司在并购中的中心地位

本文探讨了社交网络层次结构的作用并购 (M&A) 框架中的财务咨询公司。财务顾问是信息中介，起信息提取和信息传播的作用。咨询公司在咨询公司网络中越处于中心位置，他们对信息流的访问就越大。我们的研究结果表明，更多的中央顾问与更高的收购方公告异常回报、更高的异常综合回报和新实体的更高长期经营业绩相关。中央顾问还可以缓解信息不对称，从而降低投标人支付的溢价。作为回报，更多的中央咨询公司要求更高的咨询费，参与更多的并购活动，并且更有可能为大型收购者和大型公开交易的收购提供建议。