Market reaction to the merger announcements of US banks: A non-parametric X-efficiency framework
AbstractThis paper investigates the short-term market reaction of nine profit-efficiency, pre-classified merger deals of US banks over the time period from 1992 to 2003. The findings show that mergers combining low efficiency acquirers and targets create significant market returns following the merger event, while mergers combining the least efficient acquirers with moderately efficient targets diminish the acquirer's wealth more than any other type of merger. Furthermore, findings show that acquirers generally lose about 2.5% of their wealth upon the merger announcement while targets experience, on average, significant market returns of 15.5% following the merger announcement.
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Bibliographic InfoArticle provided by Elsevier in its journal Global Finance Journal.
Volume (Year): 23 (2012)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620162
Market reaction; Bank mergers; X-efficiency; Data envelopment analysis;
Find related papers by JEL classification:
- G1 - Financial Economics - - General Financial Markets
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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