My research agenda investigates dual trading, the role of market intermediaries and analyze the conflict of interests between the investment banking and trading side of intermediaries that act as financial advisors in mergers and acquisitions
Working papers
Dual Trading: A Survey
Abstract: This paper surveys academic literature related to dual trading. Dual trading is the capacity of an institution to execute orders in the exchange for both itself and its clients. That is, it can act as an intermediary or as a principal in the buying and selling of stocks. This study builds a link between the literature that studies separately the broker-dealer trading behavior, mergers and acquisitions advisory and research activities. It covers the multifaceted role of broker-dealers as a market participant in the stock financial market. This work summons to deepen the study conflict of interests and dual trading. It provides insights to analyze current regimes such as systematic internalisers that have common features with dual trading.
Target short-term value creation in M&A deals: Evidence from Euronext
Abstract: This paper reports evidence of target value creation in Mergers and Acquisitions (M&As) deals in Europe. This is indicated both by average abnormal returns, and by cumulative average abnormal returns on the event day of 1.71% and 2.36%, respectively. The sample contains 179 takeover deals for 141 target firms traded on the Amsterdam, Brussels, Lisbon and Paris stock exchanges which took place in between January 1st, 2004 and February 28th,2005. In addition, the event study allows to test for information leakage which provides an idea of potential informed trading taking place on the market. Secondly, we determine through an univariate analysis which variables influence target value creation at announcement. Finally, this study discusses the importance of taking into account country specific characteristics and the regulatory framework.
Measuring the adverse selection cost: Evidence from Euronext
Abstract: This empirical study test through an event study methodology whether there is evidence of asymmetric information in the market. We classify mergers and acquisition deals depending on whether there was an advisor involved in the deal or not. Our objective is to determine whether the cost of adverse selection (measured here as the cumulative average abnormal returns in the pre-announcement period), and thus asymmetric information is higher when an advisor is involved. We also explore those cases when the advisor has a trading activity. Our main findings show that information leakage is much higher for deals where an advisor is involved
Work in progress
Front-running and Trading Behavior of Stock Exchange Intermediaries around Public Tender Offers