Information Intermediaries: How Commercial Bankers Facilitate Strategic Alliances

56 Pages Posted: 22 Jun 2018 Last revised: 10 Dec 2018

See all articles by Marc Frattaroli

Marc Frattaroli

Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute

Christoph Herpfer

Emory University - Goizueta Business School

Date Written: June 11, 2018

Abstract

We investigate how bankers use private information to help borrowers combine resources
in strategic alliances. Firms that have borrowed from the same banker are
significantly more likely to enter an alliance. Even indirect connections through a
banker network can facilitate alliances. Consistent with bankers overcoming informational
frictions, their ability to facilitate alliances decreases with network distance, and
is stronger for opaque borrowers. Alliances are associated with positive announcement
returns and brokering banks are more likely to receive future underwriting mandates.
We exploit quasi-exogenous variation in firms’ banker networks from interstate bank
branching deregulation to show that this relationship is causal.

Keywords: Banking, Strategic Alliances, Information transmission

JEL Classification: G20, G21, G30, D74

Suggested Citation

Frattaroli, Marc and Herpfer, Christoph, Information Intermediaries: How Commercial Bankers Facilitate Strategic Alliances (June 11, 2018). Swiss Finance Institute Research Paper No. 18-53. Available at SSRN: https://ssrn.com/abstract=3192447 or http://dx.doi.org/10.2139/ssrn.3192447

Marc Frattaroli

Ecole Polytechnique Fédérale de Lausanne ( email )

Switzerland

HOME PAGE: http://www.marcfrattaroli.com

Swiss Finance Institute ( email )

c/o University of Geneva
42, Bd du Pont d'Arve
Geneva, CH-1211
Switzerland

Christoph Herpfer (Contact Author)

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
41
Abstract Views
259
PlumX Metrics