Social Networks and the Informational Role of Financial Advisory Firms Centrality in Mergers and Acquisitions

This paper examines the role of social network hierarchy financial advisory firms in a mergers and acquisitions (M&As) framework. Financial advisors are information intermediaries who play an extraction dissemination role. The more central firm is within firms, greater their access to flows. Our findings indicate that associated with higher acquirer announcement abnormal returns, combined returns operating long-run performance for new entity. Central also mitigate asymmetries, resulting lower premium paid by bidders. In return, demand fees, engage M&A activity likely advise large acquirers public deals. results robust endogeneity self-selection concerns.