The value of access to finance: Evidence from M&As

Jess Cornaggia, Jay Yin Li

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We examine synergies in mergers and acquisitions (M&As) generated by firms’ comparative advantages in access to bank finance. We find robust evidence that greater access to bank finance increases firms’ attractiveness as acquisition targets. Targets’ comparative advantage in bank finance improves bank credit supply and reduces financing costs for the merged firms. These effects are more pronounced for acquirers with greater frictions in accessing bank loans and acquirers with greater growth opportunities. Overall, this paper reveals that targets, not just acquirers, contribute to financial synergies in M&As.

Original languageEnglish (US)
JournalJournal of Financial Economics
DOIs
StateAccepted/In press - Jan 1 2018

Fingerprint

Finance
Access to finance
Synergy
Comparative advantage
Bank loans
Financing
Growth opportunities
Mergers and acquisitions
Costs
Attractiveness
Friction
Bank credit
Credit supply

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management

Cite this

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The value of access to finance : Evidence from M&As. / Cornaggia, Jess; Li, Jay Yin.

In: Journal of Financial Economics, 01.01.2018.

Research output: Contribution to journalArticle

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