The Changing Nature of Investment Banking Relationships
Shane A. Corwin
University of Notre Dame - Mendoza College of Business
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.
Number of Pages in PDF File: 64
Keywords: Investment Banking, Underwriting, M&A Advising, Underwriter Relationships
JEL Classification: G10, G24, G34, L14
Date posted: November 15, 2013 ; Last revised: May 3, 2014