Advanced Search
MyIDEAS: Login to save this article or follow this journal

Indian economic-policy reforms, bank mergers, and lawful proposals: The ex-ante and ex-post ‘lookup’

Contents:

Author Info

  • Reddy, Kotapati Srinivasa
  • Nangia, Vinay Kumar
  • Agrawal, Rajat

Abstract

Because of globalization and liberalization of the world-economy policy reforms, emerging economies have been gained popularity in academic research, especially the economics and finance areas. Indeed, India is next to China in Asian emerging markets. As of economic-policy reforms implemented in 1991, a number of sectors are being developed and restructured via mergers and acquisitions (M&As) particularly the banking sector. In this paper, we discuss India's economic-policy and financial reforms, M&As market during 2006–2010, and other policy-related aspects. In this setting, we investigate the Axis Bank–Enam Securities investment banking merger occurred in 2010. To do so, we perform ex-ante analysis by using the event study method, and offer lawful proposals to the ex-post for financial development, economic growth, and banking sector as well. We then draw fruitful conclusions through triangular linkage between the select case, post-deregulation guidelines and the current investment banking trends.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0161893812001159
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 35 (2013)
Issue (Month): 4 ()
Pages: 601-622

as in new window
Handle: RePEc:eee:jpolmo:v:35:y:2013:i:4:p:601-622

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505735

Related research

Keywords: Mergers and acquisitions; Emerging economies; Indian economy; Economic policy reforms; Investment banking; Bank mergers; Ex-ante and ex-post lookup;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Stiglitz, Joseph E., 2004. "Globalization and growth in emerging markets," Journal of Policy Modeling, Elsevier, vol. 26(4), pages 465-484, June.
  2. Agrawal, Pradeep & Sahoo, Pravakar & Dash, Ranjan Kumar, 2009. "Savings behaviour in South Asia," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 208-224.
  3. Cheng, Hui Fang & Gutierrez, Margarida & Mahajan, Arvind & Shachmurove, Yochanan & Shahrokhi, Manuchehr, 2007. "A future global economy to be built by BRICs," Global Finance Journal, Elsevier, vol. 18(2), pages 143-156.
  4. Raj Aggarwal & Aigbe Akhigbe & James McNulty, 2006. "Are Differences in Acquiring Bank Profit Efficiency Priced in Financial Markets?," Journal of Financial Services Research, Springer, vol. 30(3), pages 265-286, December.
  5. Ping-wen Lin, 2005. "An Empirical Analysis of Bank Mergers and Cost Efficiency in Taiwan," Small Business Economics, Springer, vol. 25(2), pages 197-206, 09.
  6. Cybo-Ottone, Alberto & Murgia, Maurizio, 2000. "Mergers and shareholder wealth in European banking," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 831-859, June.
  7. Adel Al-Sharkas & M. Hassan, 2010. "New evidence on shareholder wealth effects in bank mergers during 1980-2000," Journal of Economics and Finance, Springer, vol. 34(3), pages 326-348, July.
  8. Becher, David A., 2000. "The valuation effects of bank mergers," Journal of Corporate Finance, Elsevier, vol. 6(2), pages 189-214, July.
  9. Robert DeYoung & Douglas Evanoff & Philip Molyneux, 2009. "Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature," Journal of Financial Services Research, Springer, vol. 36(2), pages 87-110, December.
  10. Ramamurti, Ravi, 2012. "Competing with emerging market multinationals," Business Horizons, Elsevier, vol. 55(3), pages 241-249.
  11. Anderson, Christopher W. & Becher, David A. & Campbell, Terry II, 2004. "Bank mergers, the market for bank CEOs, and managerial incentives," Journal of Financial Intermediation, Elsevier, vol. 13(1), pages 6-27, January.
  12. Rhoades, Stephen A., 1998. "The efficiency effects of bank mergers: An overview of case studies of nine mergers," Journal of Banking & Finance, Elsevier, vol. 22(3), pages 273-291, March.
  13. Moore, Tomoe & Green, Christopher J. & Murinde, Victor, 2006. "Financial sector reforms and stochastic policy simulations: A flow of funds model for India," Journal of Policy Modeling, Elsevier, vol. 28(3), pages 319-333, April.
  14. Bittencourt, Manoel, 2012. "Financial development and economic growth in Latin America: Is Schumpeter right?," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 341-355.
  15. Richard Herd & Vincent Koen & Ila Patnaik & Ajay Shah, 2011. "Financial Sector Reform in India: Time for a Second Wave?," OECD Economics Department Working Papers 879, OECD Publishing.
  16. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
  17. Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2008. "Financial development and economic growth: The Egyptian experience," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 887-898.
  18. DeLong, Gayle L., 2001. "Stockholder gains from focusing versus diversifying bank mergers," Journal of Financial Economics, Elsevier, vol. 59(2), pages 221-252, February.
  19. Bhattacharyya, Sambit, 2012. "Trade liberalization and institutional development," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 253-269.
  20. Muhamed Majid & Fadzlan Sufian, 2006. "Consolidation and Competition in Emerging Market: An Empirical Test for Malaysian Banking Industry," Economic Change and Restructuring, Springer, vol. 39(1), pages 105-124, June.
  21. Asteriou, Dimitrios, 2009. "Foreign aid and economic growth: New evidence from a panel data approach for five South Asian countries," Journal of Policy Modeling, Elsevier, vol. 31(1), pages 155-161.
  22. Dongre, Anil P., 2012. "Policy changes in the wake of globalization and its impact on Indian industries," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 476-496.
  23. Yu, Peiyi & Van Luu, Bac, 2003. " Banking Mergers: The Impact of Financial Liberalization on the Taiwanese Banking Industry," Review of Quantitative Finance and Accounting, Springer, vol. 20(4), pages 385-413, June.
  24. Went, Peter, 2003. "A quantitative analysis of qualitative arguments in a bank merger," International Review of Financial Analysis, Elsevier, vol. 12(4), pages 379-403.
  25. Mishra, Ritesh Kumar & Sharma, Chandan, 2011. "India's demand for international reserve and monetary disequilibrium: Reserve adequacy under floating regime," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 901-919.
  26. Chu, Kam Hon, 2010. "Bank mergers, branch networks and economic growth: Theory and evidence from Canada, 1889-1926," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 265-283, March.
  27. Peiyi Yu & Werner Neus & Bac Van Luu & Sean Dodd, 2007. "Why German banks should merge," Studies in Economics and Finance, Emerald Group Publishing, vol. 24(2), pages 140-155, June.
  28. Fama, Eugene F & MacBeth, James D, 1973. "Risk, Return, and Equilibrium: Empirical Tests," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 607-36, May-June.
  29. Singh, Tarlok, 2010. "Does domestic saving cause economic growth? A time-series evidence from India," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 231-253, March.
  30. Fadzlan Sufian & Muhamed-Zulkhibri Abdul Majid, 2007. "Deregulation, consolidation and banks efficiency in Singapore: Evidence from event study window approach and Tobit analysis," International Review of Economics, Springer, vol. 54(2), pages 261-283, June.
  31. Behr, Andreas & Heid, Frank, 2011. "The success of bank mergers revisited. An assessment based on a matching strategy," Journal of Empirical Finance, Elsevier, vol. 18(1), pages 117-135, January.
  32. Hermes, Niels & Lensink, Robert, 2000. "Financial system development in transition economies," Journal of Banking & Finance, Elsevier, vol. 24(4), pages 507-524, April.
  33. Spence, A. Michael, 2009. "The financial and economic crisis and the developing world," Journal of Policy Modeling, Elsevier, vol. 31(4), pages 502-508, July.
  34. Manish Agarwal & Aditya Bhattacharjea, 2006. "Mergers in India. A Response to Regulatory Shocks," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 42(3), pages 46-65, May.
  35. Soedarmono, Wahyoe & Machrouh, Fouad & Tarazi, Amine, 2011. "Bank market power, economic growth and financial stability: Evidence from Asian banks," Journal of Asian Economics, Elsevier, vol. 22(6), pages 460-470.
  36. Enrico Tanuwidjaja, 2007. "Multi-factor SUR in event study analysis: evidence from M&A in Singapore's financial industry," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 3(1), pages 55-62, January.
  37. B. Rajesh Kumar & K.M. Suhas, 2010. "An analytical study on value creation in Indian bank mergers," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 2(2), pages 107-134.
  38. John Goddard & Philip Molyneux & Tim Zhou, 2012. "Bank mergers and acquisitions in emerging markets: evidence from Asia and Latin America," The European Journal of Finance, Taylor & Francis Journals, vol. 18(5), pages 419-438, May.
  39. Gayle L. DeLong, 2003. "Does Long-Term Performance of Mergers Match Market Expectations? Evidence from the US Banking Industry," Financial Management, Financial Management Association, vol. 32(2), Summer.
  40. Bouët, Antoine & Berisha-Krasniqi, Valdete & Estrades, Carmen & Laborde, David, 2012. "Trade and investment in Latin America and Asia: Perspectives from further integration," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 193-210.
  41. Fotios Pasiouras & Chrysovalantis Gaganis & Constantin Zopounidis, 2008. "Regulations, Supervision Approaches and Acquisition Likelihood in the Asian Banking Industry," Asia-Pacific Financial Markets, Springer, vol. 15(2), pages 135-154, June.
  42. Zoellick, Robert B., 2012. "China in the world economy," Journal of Policy Modeling, Elsevier, vol. 34(4), pages 533-537.
  43. Bhattacharyya, Indranil & Sensarma, Rudra, 2008. "How effective are monetary policy signals in India," Journal of Policy Modeling, Elsevier, vol. 30(1), pages 169-183.
  44. Montek S. Ahluwalia, 2002. "Economic Reforms in India Since 1991: Has Gradualism Worked?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 67-88, Summer.
  45. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
  46. Yang, Yung Y. & Yi, Myung Hoon, 2008. "Does financial development cause economic growth? Implication for policy in Korea," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 827-840.
  47. Elena Beccalli & Pascal Frantz, 2009. "M&A Operations and Performance in Banking," Journal of Financial Services Research, Springer, vol. 36(2), pages 203-226, December.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:35:y:2013:i:4:p:601-622. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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