Does Long-Term Performance of Mergers Match Market Expectations? Evidence from the US Banking Industry
AbstractThere is a paradox in bank mergers. On average, bank mergers do not create value, yet they continue to occur. Using cross-sectional analysis to examine 54 bank mergers announced between 1991 and 1995, I test several facets of focus and diversification. Upon announcement, the market rewards the mergers of partners that focus their geography and activities and earnings streams. Only one of these facets, focusing earnings streams, enhances long-term performance. Two other circumstances improve long-term performance: 1) when a merger involves a relatively inefficient acquirer and 2) when partners reduce bankruptcy costs.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Financial Management Association in its journal Financial Management.
Volume (Year): 32 (2003)
Issue (Month): 2 (Summer)
Contact details of provider:
Postal: University of South Florida 4202 E. Fowler Ave. COBA #3331 Tampa, FL 33620
Web page: http://www.fma.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gayle DeLong & Robert DeYoung, 2004. "Learning by observing: information spillovers in the execution and valuation of commercial bank M&As," Working Paper Series WP-04-17, Federal Reserve Bank of Chicago.
- Knapp, Morris & Gart, Alan & Chaudhry, Mukesh, 2006. "The impact of mean reversion of bank profitability on post-merger performance in the banking industry," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3503-3517, December.
- Julapa Jagtiani, 2008. "Understanding the effects of the merger boom on community banks," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 29-48.
- Valkanov, Emil & Kleimeier, Stefanie, 2007.
"The role of regulatory capital in international bank mergers and acquisitions,"
Research in International Business and Finance,
Elsevier, vol. 21(1), pages 50-68, January.
- Valkanov,Emil & Kleimeier,Stefanie, 2005. "The Role of Regulatory Capital in International Bank Mergers and Acquisitions," Research Memorandum 017, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Gleason, Kimberly & McNulty, James E. & Pennathur, Anita K., 2005. "Returns to acquirers of privatizing financial services firms: An international examination," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2043-2065, August.
- Reddy, Kotapati Srinivasa & Nangia, Vinay Kumar & Agrawal, Rajat, 2013. "Indian economic-policy reforms, bank mergers, and lawful proposals: The ex-ante and ex-post ‘lookup’," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 601-622.
- Ahammad, Mohammad Faisal & Glaister, Keith W., 2013. "The pre-acquisition evaluation of target firms and cross border acquisition performance," International Business Review, Elsevier, vol. 22(5), pages 894-904.
- 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.
- Claudia M. Buch & Gayle L. DeLong, 2008. "Banking Globalization: International Consolidation and Mergers in Banking," IAW Discussion Papers 38, Institut für Angewandte Wirtschaftsforschung (IAW).
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Courtney Connors) The email address of this maintainer does not seem to be valid anymore. Please ask Courtney Connors to update the entry or send us the correct address.
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.