We provide new evidence on the role of financial advisors in M&As. Contrary to prior studies, top-tier advisors deliver higher bidder returns than their non-top-tier counterparts but in public acquisitions only, where the advisor reputational exposure and required skills set are relatively larger. This translates into a $65.83 million shareholder gain for an average bidder. The improvement comes from top-tier advisors' ability to identify more synergistic combinations and to get a larger share of synergies to accrue to bidders. Consistent with the premium price-premium quality equilibrium, top-tier advisors charge premium fees in these transactions.MERGERS AND ACQUISITIONS (M&As) constitute one of the most important activities in corporate finance, bringing about substantial reallocations of resources within the economy. In 2007 alone, when the most recent merger wave peaked, corporations spent $4.2 trillion on M&A deals worldwide. Investment banks advised on over 85% of these deals by transaction value, generating an estimated $39.7 billion in advisory fees.

This paper examines the value effect of working capital management (WCM) for a large sample of US firms over the period 1982-2011. Taking into account omitted variables and reverse causality, we show that the decrease in working capital across time leads to increasing performance. This relationship is driven by firms that have substantial cash unnecessarily tied up in working capital. Importantly, we also show that corporate investment is the channel through which improvement in WCM translates into superior performance. Finally, the value effect of WCM is attenuated during the financial crisis, due to the contraction of the investment opportunity set. JEL classification: G31, G32Keywords: Working capital management, Performance, Investment, Reverse causality, Risk *Corresponding author. Tel.: +49 261 6509 224. E-mail addresses: nihat.aktas@whu.edu (N. Aktas), ettore.croci@unicatt.it (E. Croci), d.petmezas@surrey.ac.uk (D. Petmezas). AcknowledgementWe thank Yakov Amihud, Hubert de la Bruslerie, Lorenzo Caprio, Riccardo Calcagno, Andrey Golubov, Ulrich Hofbaur, Alexander Kempf, François Larmande, Oguzhan Ozbas, Alain Schatt, Oktay Tas, Nickolaos Travlos, and seminar participants at the University of Cologne, University of Lausanne, and Istanbul Technical University for their comments and suggestions. We are grateful to Rongbing Huang and Inessa Love for sharing with us their codes for estimating the long-differencing technique and the PVAR model, respectively. All remaining errors are our own. 1

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"We examine whether acquisitions by overconfident managers generate superior abnormal returns and whether managerial overconfidence stems from self-attribution. Self-attribution bias suggests that overconfidence plays a greater role in higher order acquisition deals predicting lower wealth effects for higher order acquisition deals. Using two alternative measures of overconfidence (1) high order acquisition deals and (2) insider dealings we find evidence supporting the view that average stock returns are related to managerial overconfidence. Overconfident bidders realise lower announcement returns than rational bidders and exhibit poor long-term performance. Second, we find that managerial overconfidence stems from self-attribution bias. Specifically, we find that high-order acquisitions (five or more deals within a three-year period) are associated with lower wealth effects than low-order acquisitions (first deals). That is, managers tend to credit the initial success to their own ability and therefore become overconfident and engage in more deals. In our analysis we control for endogeneity of the decision to engage in high-order acquisitions and find evidence that does not support the self-selection of excessive acquisitive firms. Our analysis is robust to the influence of merger waves, industry shocks, and macroeconomic conditions." Copyright 2007 The Authors Journal compilation (c) 2007 Blackwell Publishing Ltd.

Using a global M&A data set, this paper provides evidence that the empirical observations relating public acquisitions to, at best, zero abnormal returns, and their stockfinanced subset to negative abnormal returns for acquiring firms around the deal announcement are not unanimous across countries. Acquirers beyond the most competitive takeover markets (the U.S., U.K., and Canada) pay lower premia and realize gains, while share-for-share offers are at least non-value destroying for their shareholders. In contrast, target shareholders within these markets gain significantly less, implying that the benefits generated are more evenly split between the involved parties.