English, Article, Journal or magazine article edition: Determinants of domestic and cross-border bank acquisitions in the European Union Larry D. Wall; Ignacio Hernando; María J. Nieto

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Bookmark: http://trove.nla.gov.au/version/161708
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Determinants of domestic and cross-border bank acquisitions in the European Union
Author
  • Larry D. Wall
  • Ignacio Hernando
  • María J. Nieto
Physical Description
  • preprint
Notes
  • This paper analyzes the determinants of bank acquisitions both within and across 25 members of the European Union (EU-25) during the period 1997–2004. Our results suggest that poorly managed banks (those with a high cost-to-income ratio) and larger banks are more likely to be acquired by other banks in the same country. The probability of being a target in a cross-border deal is larger for banks that are quoted in the stock market. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks in the same country but are more likely to be acquired by banks in other EU-25 countries.
  • Banks and banking - Europe
  • RePEc:fip:fedawp:2008-26
  • This paper analyzes the determinants of bank acquisitions both within and across countries in the EU-25 over the period 1997-2004. The findings of this paper are broadly in line with those of the academic literature on the subject, which are mainly based on the US experience. Our results suggest poorly managed EU-25 banks (high cost to income) are more likely to be acquired by other EU-25 banks, in the same country. Nevertheless, this underperformance of target banks does hold for cross border bank acquisitions only if compared to the median of the market. Larger banks are more likely to be acquired by other banks in the same country. The probability of being acquired by another bank in the same market is larger for banks that are quoted in the stock market, which is consistent with the disciplinary character of listing in the stock markets. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks operating within the same country but are more likely to be acquired by banks in other EU-25 countries.
  • bank acquisitions, merger gains, probability of acquisition
  • RePEc:bde:wpaper:0823
Language
  • English
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