The Changing Nature of Investment Banking Relationships

64 Pages Posted: 15 Nov 2013 Last revised: 3 May 2014

Shane A. Corwin

University of Notre Dame - Mendoza College of Business

Mike Stegemoller

Baylor University

Date Written: April 2014

Abstract

We examine relationships between firms and their investment banks (IBs), both within and across different IB functions. For all transaction types, we find an increase in the number of relationships and a decrease in relationship exclusivity over time. We identify significant transaction-type specific relationship components, with relationships being strongest for equity and weakest for M&A. Relationships are less exclusive for firms with more bargaining power and more exclusive for younger, smaller firms, and firms with more growth options. Most importantly, we find strong evidence of a firm-wide relationship component that spans the functional areas of I-banking and increases over time.

Keywords: Investment Banking, Underwriting, M&A Advising, Underwriter Relationships

JEL Classification: G10, G24, G34, L14

Suggested Citation

Corwin, Shane A. and Stegemoller, Mike, The Changing Nature of Investment Banking Relationships (April 2014). Available at SSRN: https://ssrn.com/abstract=2354565 or http://dx.doi.org/10.2139/ssrn.2354565

Shane A. Corwin (Contact Author)

University of Notre Dame - Mendoza College of Business ( email )

240 Mendoza College of Business
Notre Dame, IN 46556-0399
United States

Michael A. Stegemoller

Baylor University ( email )

P.O. Box 98004
Waco, TX 76798-8004
United States
254-710-4145 (Phone)

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