Investment banking, the certification effect and M&A deals: An event study approach

Several studies have found the existence of a relationship between the role of investment banks appointed as advisors in M&A deals and the yields earned by their clients. Traditionally this relationship is fostered by the ability of the leading investment banks to arrange and structure the best deals – i.e. the Superior Deal Hypothesis – and by the “certification effect”, namely that their presence provides assurance to the capital markets...