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Research seminar The impact of bank-firm relationships on mergers and acquisitions in Japan

2017-05-11

ISM kindly invites to participate in Research Seminar Relationships matter: the impact of bank-firm relationships on mergers and acquisitions in Japan by Joseph J. French, Tointon Professor for research at the University of Northern Colorado, USA.

Seminar will take place on the 11th of May, 10:30, room 501. 

Abstract:

Does firm structure influence the decision to merge?  This research examines this question by dissecting the impact of bank-firm relationships on the likelihood and size of mergers and acquisitions (M&A) in Japan.  A unique aspect of the Japanese economy is the traditionally close ties of Japanese firms with a ‘main bank’. Japanese firms rely more on bank debt than do firms in the US or UK. It is also common for a firm to have one or more representatives from a financial institution on its board of directors. Furthermore, to mitigate unwelcome takeover threats, Japanese companies frequently link to each other through reciprocal holdings of each other’s equity.  These unique characteristics of the Japanese banking sector provide an excellent laboratory to understand how various aspects of bank-firm relationships impact M&A.  Overall, in contrast to conventional wisdom of the adverse effects of bank-firm relationships, our results indicate that Japanese banks facilitate expansion and generally promoted restructuring in the 2000’s. However, when the bank is also a sizable equity owner, the facilitating role of bank-firm relationships on M&A is subjugated by a desire to maintain existing corporate governance frameworks.  Given that bank-firm relationships in many nations are multifaceted, our research has implications for understanding M&A decisions throughout the world.

Speaker bio:

Joseph J. French is the Tointon Professor for research at the University of Northern Colorado.  Joe holds a PhD in financial economics from the University of New Orleans and a MBA from Clemson University.  Joe's research interests are in the areas of international finance, applied econometrics, and developmental economics.  His research appears in leading academic journals including: The Journal of Empirical Finance, Emerging Markets Review, The Journal of Economics, and the Quarterly Review of Economics and Finance among others.  Joe has been fortunate to research and teach throughout the world.  He has been named a visiting scholar or professor in more than 20 countries.

Please register online in advance here>>>.