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Working Paper
Learning by observing: information spillovers in the execution and valuation of commercial bank M&As
We hypothesize that banks become better able to manage acquisitions, and investors become better able to value those acquisitions, as these parties ?learn-by-observing? information that spills-over from previous bank M&As. We find evidence consistent with these hypotheses for 216 M&As of large, publicly traded U.S. commercial banks between 1987 and 1999. Our theory and our results are predicated on the idea that acquisitions of large and increasingly complex commercial banks were a relatively new phenomenon in the late-1980s, with no best practices to inform bank managers and little ...