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Bank Governance and Acquisition Performance

Author

Listed:
  • Jens Hagendorff

    (Leeds University Business School)

  • Michael Collins

    (Leeds University Business School)

  • Kevin Keasey

Abstract

Given the pivotal role of banks in modern economies, the worldwide phenomenon of a high level of bank M&A activity and the consensus view in empirical studies that bank mergers destroy value for acquiring bank shareholders, it is highly surprising that the influence of corporate governance on the outcomes of bank acquisitions has received very little academic scrutiny. The recent wave of consolidation in the financial services industry, with its generally unfavourable wealth implications for the shareholders of acquiring institutions, points to the impact of poor bank governance structures. Moreover, the banking sector warrants a separate agency analysis because it is unusual, if not unique, in terms of the opaque nature of many of its main activities and in terms of the pervasive role of regulation in the industry. Both of these attributes may weaken well-established monitoring mechanisms as safeguards of shareholder interests. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Jens Hagendorff & Michael Collins & Kevin Keasey, 2007. "Bank Governance and Acquisition Performance," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 957-968, September.
  • Handle: RePEc:bla:corgov:v:15:y:2007:i:5:p:957-968
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    References listed on IDEAS

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    1. Collins, Michael & Baker, Mae, 2003. "Commercial Banks and Industrial Finance in England and Wales, 1860-1913," OUP Catalogue, Oxford University Press, number 9780199249862.
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    1. repec:jfr:ijfr11:v:8:y:2017:i:4:p:80-89 is not listed on IDEAS
    2. Hagendorff, Jens & Collins, Michael & Keasey, Kevin, 2008. "Investor protection and the value effects of bank merger announcements in Europe and the US," Journal of Banking & Finance, Elsevier, vol. 32(7), pages 1333-1348, July.
    3. Ghosh, Chinmoy & Petrova, Milena, 2013. "Does deregulation induce competition in the market for corporate control? The special case of banking," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5220-5235.
    4. Luo, Yongli, 2015. "CEO power, ownership structure and pay performance in Chinese banking," Journal of Economics and Business, Elsevier, vol. 82(C), pages 3-16.
    5. Yan Liu & Carol Padgett & Simone Varotto, 2014. "Corporate Governance, Bank Mergers and Executive Compensation," ICMA Centre Discussion Papers in Finance icma-dp2014-18, Henley Business School, Reading University.
    6. repec:spt:apfiba:v:7:y:2017:i:6:f:7_6_6 is not listed on IDEAS
    7. Alessandro Carretta & Vincenzo Farina & Paola Schwizer, 2010. "Assessing effectiveness and compliance of banking boards," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 18(4), pages 356-369, November.
    8. 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;Western Finance Association, vol. 36(2), pages 87-110, December.
    9. Jens Hagendorff & Kevin Keasey, 2009. "Post-merger strategy and performance: evidence from the US and European banking industries," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(4), pages 725-751.

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