Financial advisors and industry merger and acquisition waves

Abstract

The thesis examines whether financial advisors play a role in the formation of merger and acquisition (M&A) waves at the industry level. The analysis demonstrates that financial advisors are the primary drivers of industry M&A waves. This finding suggests that financial advisors encourage companies to conduct M&A deals and thus contribute to the generation of industry M&A waves. The effects of financial advisors are consistent across different industry shocks that have been previously identified under the neoclassical theory. This thesis also finds that the interactions between financial advisors and different industry shocks are significantly and positively correlated with industry M&A waves, suggesting that financial advisors contribute to the effect of industry shocks in generating industry M&A waves. The results are robust to endogeneity controls and alternative explanations.