Management Review

›› 2019, Vol. 31 ›› Issue (5): 213-230.

Previous Articles     Next Articles

The Smartness of Top Financial Advisors in Catering to Client's Requirement: Evidence from China's M&A Market

Zhong Ziying1, Deng Kebin2,3   

  1. 1. School of Accounting, Guangdong University of Foreign Studies, Guangzhou 510006;
    2. School of Economic and Trade, South China University of Technology, Guangzhou 510006;
    3. The Research Center of Supply Chain Finance of Guangdong Province, Guangzhou 510006
  • Received:2017-10-23 Online:2019-05-28 Published:2019-05-31

PDF (PC)

496

Abstract:

This paper provides empirical evidence to demonstrate that top M&A financial advisors are very good at helping clients either perform better after M&A or enhance the certainty of completing a M&A transaction, depending on each client's specific requirement. We divide financial advisor's clients into opportunists and non-opportunists. The former seeks to get listed through reverse merger, obtain refinancing qualification or protect listed shell and they pay more attention to the certainty of completing a M&A transaction than to the post-M&A performance, while the latter prefers better post-M&A performance to higher certainty of completing a M&A transaction. Our evidence implies that top financial advisors of non-opportunists are more able to help clients perform better after M&A and help opportunist clients enhance the certainty of completing a M&A transaction. Therefore, we unify the existing debatable literature on the role of top financial advisors by introducing clients' requirement as a variable.

Key words: financial advisor, professional capability, M&A, opportunism