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Banking Crises and Market Timing: Evidence from M&As in the Banking Sector

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  • Chung-Hua Shen

    (Nanjing Audit University
    Shih Chien University)

  • Yehning Chen

    (National Taiwan University)

  • Hsing-Hua Hsu

    (National Taiwan University)

  • Chih-Yung Lin

    (National Chiao-Tung University)

Abstract

We investigate whether the gains are greater for banks that conduct mergers and acquisitions (M&As) during banking crises than during non-crisis periods. We contribute to the literature by examining 1984 M&As using global banking sample from 106 countries (areas) during 1994 ~ 2009. We find the synergistic gains of acquiring banks during banking crises are larger than those during non-crisis periods. We further find that such gains are greater when acquiring weak targets, for acquirers in developed countries, and for acquirers in domestic M&As. This study confirms that a banking crisis is an appropriate time for banks to conduct M&As.

Suggested Citation

  • Chung-Hua Shen & Yehning Chen & Hsing-Hua Hsu & Chih-Yung Lin, 2020. "Banking Crises and Market Timing: Evidence from M&As in the Banking Sector," Journal of Financial Services Research, Springer;Western Finance Association, vol. 57(3), pages 315-347, June.
    • Handle: RePEc:kap:jfsres:v:57:y:2020:i:3:d:10.1007_s10693-019-00318-4
    DOI: 10.1007/s10693-019-00318-4
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    Cited by:

    1. Joan Calzada & Xavier Fageda & Fernando Martínez-Santos, 2023. "Mergers and bank branches: two decades of evidence from the USA," Empirical Economics, Springer, vol. 64(5), pages 2411-2447, May.
    2. Gregory D. Maslak & Gonca Senel, 2023. "Bank Consolidation and Systemic Risk: M&A During the 2008 Financial Crisis," Journal of Financial Services Research, Springer;Western Finance Association, vol. 63(2), pages 201-220, April.

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    More about this item

    Keywords

    Banking crises; Mergers and acquisitions; Synergistic gains;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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