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How Did The Asian Stock Markets React To Bank Mergers After The 1997 Financial Crisis?

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  • Céline Crouzille
  • Laetitia Lepetit
  • Carlos Bautista

Abstract

The objective of this paper is to empirically assess the stock market reaction to the announcement of bank mergers and acquisitions (M&As) in eight East Asian countries over the 1997-2003 period. M&As are classified according to the status of entity, the time period of the deal and the maturity of the banking system. A bivariate GARCH model is used to estimate abnormal returns taking beta conditional variability into account. We find that the market reacted negatively to M&As during the crisis period (1997-2000) and also in the less mature banking systems (Indonesia, Malaysia, the Philippines, South Korea and Thailand). Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Ltd

Suggested Citation

  • Céline Crouzille & Laetitia Lepetit & Carlos Bautista, 2008. "How Did The Asian Stock Markets React To Bank Mergers After The 1997 Financial Crisis?," Pacific Economic Review, Wiley Blackwell, vol. 13(2), pages 171-182, May.
  • Handle: RePEc:bla:pacecr:v:13:y:2008:i:2:p:171-182
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    1. repec:dgr:rugsom:14029-eef is not listed on IDEAS
    2. Pasiouras, Fotios & Gaganis, Chrysovalantis & Zopounidis, Constantin, 2010. "Multicriteria classification models for the identification of targets and acquirers in the Asian banking sector," European Journal of Operational Research, Elsevier, vol. 204(2), pages 328-335, July.

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