College of Business
BBA (Bachelor of Business Administration)
Session and Year of Graduation
Honors Major Advisor
Numerous academic studies point out the detrimental effects of large acquisitions on the performance of acquirers, often concluding that companies rarely recognize the revenue and cost synergies that they hope to attain with an acquisition. Concurrently, a number of finance professionals propose that investment bankers tend to maintain extreme optimism about the value of acquisitions. Thus, in study I ask the following research question: Are individuals with work experience in investment banking more likely to participate in M&A activity than their non-banking peers? Specifically, I test whether the executives (specifically CFOs) of publicly traded technology companies with investment banking work experience are more likely to make acquisitions than their peers who have never worked in transaction advisory. I predict that CFOs with backgrounds in investment banking are more likely to participate in M&A activity due to the confidence they possess in their ability to realize merger synergies. I find evidence indicating that firms with CFOs with work experience in the investment banking industry make more acquisitions than firms that have CFOs with no investment banking work experience. That is, CFOs with investment banking work experience make twice as many acquisitions as firms that have CFOs with no investment banking experience.
investment banking, acquisitions, management decision making
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