IDEAS home Printed from https://ideas.repec.org/a/cud/journl/v41y2018i116p167-180.html
   My bibliography  Save this article

Mergers in financial services and overlending

Author

Listed:
  • David Peón

    (Department of Business, University of A Coruna (Spain))

  • Manel Antelo

    (Department of Economics, University of Santiago de Compostela (Spain))

Abstract

In this paper we build a model of banking competition that considers a managerial-overconfidence setup resulting in two main findings. First, a merger between rational banks may change their behaviour in that, in post-merger conditions, they would follow the overconfident bank when they would not have done so pre-merger, thereby amplifying the credit boom. Second, the results overcome the merger paradox, in the sense that the merger would be profitable for participants and thus intrinsically stable.

Suggested Citation

  • David Peón & Manel Antelo, 2018. "Mergers in financial services and overlending," Cuadernos de Economía - Spanish Journal of Economics and Finance, Asociación Cuadernos de Economía, vol. 41(116), pages 167-180, Enero.
    • Handle: RePEc:cud:journl:v:41:y:2018:i:116:p:167-180
    as

    Download full text from publisher

    File URL: https://repositorio.uam.es/bitstream/handle/10486/690832/CE_41_116_2.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Peón & Manel Antelo, 2019. "Do bad borrowers hurt good borrowers? A model of biased banking competition," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 18(1), pages 5-17, February.

    More about this item

    Keywords

    Banking efficiency; Behavioural finance; Mergers; Herding; Merger paradox; Overconfidence;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cud:journl:v:41:y:2018:i:116:p:167-180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Erick Tinsson (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.