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How to make a deal



Type:   Article
Titre:   How to make a deal : The role of rankings and personal ties in creating trust in the mergers and acquisitions market
Auteur(s):   Boussard, Valérie - Professions, institutions, temporalités (Auteur)
Godechot, Olivier - Observatoire sociologique du changement (Auteur)
Woloszko, Nicolas - École normale supérieure - Cachan (ENS Cachan) (Auteur)
In:   Socio-Economic Review
Date de publication:   2017-12
Éditeur:   ROYAUME-UNI  :  Oxford University Press
Volume:   0
Numéro:   0
Pages:   1-26  p.
ISSN:   14751461
DOI:   10.1093/ser/mwx056
Mots-clés:   [en] Finance, Rankings, Networks, Trust
JEL:   G24,  L14,  L15
Résumé:   [en] On the mergers and acquisitions (M&A) market, buyers and sellers resort to experts in order to secure deals. But as these experts might be prone to opportunism, firms need to find a way to build trust. We identify two trust devices: social ties and public rankings. We explore whether these personal and impersonal devices are substitutes, independent or complementary. We study the French M&A market through a mixed-method approach. We show that both previous contacts and league table rankings of firms contribute to trust and to making deals. These trust devices are all the more likely to be used if the deal is risky, especially within the sell side (more at risk). We also find that firms tend to make deals only with other firms at the same level in the rankings. Finally, we find some evidence of substitution between rankings and personal ties, especially for low-value deals.


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