Information intermediaries: how commercial bankers facilitate strategic alliances

We investigate how bankers use private information to help borrowers combine resources in strategic alliances. Firms that have borrowed from the same banker are significantly more likely to enter an alliance. Even indirect connections through a banker network can facilitate alliances. 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 firms' banker networks from interstate bank branching deregulation to show that this relationship is causal.