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Christoph Herpfer – Emory – Brown Bag Series
24 September @ 1:30 pm - 2:30 pm
Marc Frattaroli | Christoph Herpfer
July 4, 2019
We investigate how bankers use information from lending relationships to help borrowers combine resources in strategic alliances. Firms that have borrowed from the same banker or share an indirect connection through a network of bankers are signiﬁcantly more likely to enter an alliance. Consistent with bankers overcoming informational frictions, their ability to facilitate alliances decreases with network distance, and is stronger for opaque borrowers. Alliances are associated with positive announcement returns and brokering banks are more likely to receive future underwriting mandates. We exploit quasi-exogenous variation in banker networks from interstate branching deregulation to show that this relationship is causal.