Investment banks as financial advisors in malaysian mergers and acquisitions. Our study examines the factors that affect the choice of hiring an investment bank as financial advisor in the merger and acquisition transactions of Malaysian acquirers. In the period from January 1995 to December 2012, approximately percent of the Malaysian acquirers hire an investment bank when conducting M&A transactions. | Journal of Economics and Development, , , April 2017, pp. 25-38 ISSN 1859 0020 Investment Banks as Financial Advisors in Malaysian Mergers and Acquisitions Cao Dinh Kien Foreign Trade University, Vietnam Email: caokien@ Nguyen Thu Thuy Foreign Trade University, Vietnam Email: Nguyen Minh Phuong Foreign Trade University, Vietnam Email: phuongnm7@ Abstract Our study examines the factors that affect the choice of hiring an investment bank as financial advisor in the merger and acquisition transactions of Malaysian acquirers. In the period from January 1995 to December 2012, approximately percent of the Malaysian acquirers hire an investment bank when conducting M&A transactions. On the other hand, percent of the target firms employ at least one investment bank as financial advisor when dealing with Malaysian bidders. Our findings reveal that both participants tend to hire an investment bank when the acquirer operates in the technology sector, the deal takes place in a crisis period and the value of the transaction is high. An acquirer who has a high debt ratio is less likely to employ an investment bank and a publicly traded target is more likely to employ an investment bank in their M&A transactions. Moreover, our results show that, in a complex environment, the hiring of an investment banking is not for the valuation purpose. Keywords: Behavioral finance; investment policy; investment banking; market efficiency; mergers & acquisitions. Journal of Economics and Development 25 Vol. 19, , April 2017 1. Introduction the deal will be completed. However, Rau also points out that announcement returns earned by acquirers in deals involving top-tier banks are not higher and in the long term the returns are lower than those involving lesser quality advisors, which is supported by Rau and Rodgers (2002). The role of investment banks as financial advisors in mergers and acquisitions (M&As) is extensively .
