Corporate Acquisitions and Bank Relationships

Tinbergen Institute Discussion Paper 2021-082/IV

68 Pages Posted: 20 Sep 2021 Last revised: 25 Sep 2021

See all articles by Steven Poelhekke

Steven Poelhekke

University of Auckland

Razvan Vlahu

De Nederlandsche Bank

Vadym Volosovych

Erasmus University Rotterdam (EUR)

Date Written: September 16, 2021


Using a large dataset of firm-bank and ownership information for 23 European countries over 2008-2015, we study the dynamics of bank relationships after corporate acquisitions and the effects of changing banks on firm performance. Foreign acquirers do not rely on internal capital markets but keep targets' domestic banks. With more domestic banks, firms increase fixed capital and trade credit. In contrast, domestic acquirers remove domestic but add foreign banks. The latter mainly help reduce the cost of financing. We further explore firm and bank heterogeneity and confirm cost of financing and information asymmetry as plausible reasons to change bank.

Keywords: Acquisitions, Firm-bank relationships, Firm financing, Operating performance

JEL Classification: G34, D82, E51, F36, G21

Suggested Citation

Poelhekke, Steven and Vlahu, Razvan and Volosovych, Vadym, Corporate Acquisitions and Bank Relationships (September 16, 2021). Tinbergen Institute Discussion Paper 2021-082/IV, Available at SSRN: or

Steven Poelhekke

University of Auckland ( email )

New Zealand

HOME PAGE: http://

Razvan Vlahu

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
+31205242483 (Phone)
+31205242506 (Fax)

Vadym Volosovych (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
Room E2-31
3000 DR Rotterdam, 3062PA
+31 10 408 1286 (Phone)
+31 10 408 9165 (Fax)

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