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The effect of merger and acquisition announcement on Greek bank stock returns

Author

Listed:
  • Panayiotis P. Athanasoglou

    () (Bank of Greece)

  • Ioannis G. Asimakopoulos

    () (Bank of Greece)

  • Evangelia A. Georgiou

    () (Bank of Greece)

Abstract

This study examines the response of Greek bank stock prices to the announcement of intended mergers and acquisitions (M&As) during the period 1998-1999, applying a standard event study methodology. The results show that both the acquiring banks and, albeit to a lesser extent, the target banks experience significant positive abnormal stock returns that last for a few days around the announcement date. These returns are more evident in the period before the announcement thus indicating either that rumours circulate or that inside information is being abused. The efficient market hypothesis in its semi-strong form seems to be violated for the period under examination, as abnormal returns remain evident for several days after the announcement date.

Suggested Citation

  • Panayiotis P. Athanasoglou & Ioannis G. Asimakopoulos & Evangelia A. Georgiou, 2005. "The effect of merger and acquisition announcement on Greek bank stock returns," Economic Bulletin, Bank of Greece, issue 24, pages 27-44, January.
  • Handle: RePEc:bog:econbl:y:2005:i:24:p:27-44
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    File URL: https://www.bankofgreece.gr/BogEkdoseis/econbull200501.pdf
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    References listed on IDEAS

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    1. Sideris, Dimitrios, 2006. "Testing for long-run PPP in a system context: Evidence for the US, Germany and Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 16(2), pages 143-154, April.
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    Cited by:

    1. Dimitra Dimitropoulou & Anastasia Koutsomanoli-Filippaki & Evangelos Charalambakis & Georgios Aggelis, 2014. "The financing of Greek enterprises before and during the crisis," Economic Bulletin, Bank of Greece, issue 39, pages 7-20, July.
    2. Costas N. Kanellopoulos, 2012. "Employment and worker flows during the financial crisis," Economic Bulletin, Bank of Greece, issue 36, pages 31-41, April.
    3. Zacharias Bragoudakis & Stelios Panagiotou, 2010. "Determinants of the receipts from shipping services: the case of Greece," Economic Bulletin, Bank of Greece, issue 34, pages 41-55, September.
    4. Costas N. Kanellopoulos, 2014. "The private sector Greek labour market during the crisis," Economic Bulletin, Bank of Greece, issue 39, pages 21-36, July.
    5. Petros M. Migiakis, 2012. "Reviewing the proposals for common bond issuances by the euro-area sovereign under a long-term perspective," Economic Bulletin, Bank of Greece, issue 37, pages 43-54, December.
    6. Christos Papazoglou, 2009. "Is Greece's export performance really low?," Economic Bulletin, Bank of Greece, issue 32, pages 27-37, May.
    7. Aikaterini Chaireti, 2014. "The housing situation of residents of Greece in the time of crisis 2008-2012," Economic Bulletin, Bank of Greece, issue 39, pages 105-141, July.
    8. Costas N. Kanellopoulos, 2012. "The Size and structure of uninsured employment," Economic Bulletin, Bank of Greece, issue 37, pages 23-41, December.
    9. Theodoros Mitrakos & Panos Tsaklogou & Ioannis Cholezas, 2010. "Determinants of the wage rates in Greece with an emphasis on the wages of tertiary education graduates," Economic Bulletin, Bank of Greece, issue 34, pages 7-40, September.
    10. Faidon Kalfaoglou, 2014. "European banking union: “Europeanising” banks’ financial safety net," Economic Bulletin, Bank of Greece, issue 39, pages 37-72, July.
    11. Nikos G. Zonzilos & Zacharias G. Bragoudakis & Georgia I. Pavlou, 2009. "An analysis of the reliability of first (flash) quarterly national account data releases for Greece," Economic Bulletin, Bank of Greece, issue 32, pages 39-51, May.
    12. Papaspyrou Theodoros, 2012. "EMU sustainability and the prospects of peripheral economies," Economic Bulletin, Bank of Greece, issue 36, pages 7-29, April.
    13. Zacharias Bragoudakis & Dimitrios Sideris, 2012. "Do retail gasoline prices adjust symmetrically to crude oil price changes? the case of the Greek oil market," Economic Bulletin, Bank of Greece, issue 37, pages 7-21, December.
    14. Theodore Mitrakos & Panos Tsakloglou & Ioannis Cholezas, 2010. "Determining factors of youth unemployment in Greece with emphasis on tertiary education graduates," Economic Bulletin, Bank of Greece, issue 33, pages 21-62, May.
    15. Theodoros M. Mitrakos & George T. Simigiannis, 2009. "The determinants of Greek household indebtedness and financial stress," Economic Bulletin, Bank of Greece, issue 32, pages 7-26, May.
    16. Hiona Balfoussia & Heather Gibson, 2010. "Inflation and Nominal Uncertainty: the case of Greece," Economic Bulletin, Bank of Greece, issue 33, pages 63-78, May.
    17. Vassilis Th. Rapanoss & Georgia Kaplanoglou, 2010. "Independent Fiscal Councils and Their Possible Role in Greece," Economic Bulletin, Bank of Greece, issue 33, pages 7-20, May.
    18. Faidon Kalfaoglou, 2012. "Bank capital adequacy framework," Economic Bulletin, Bank of Greece, issue 36, pages 43-81, April.
    19. Petros M Migiakis, 2010. "Determinants of the Greek stock-bond correlation," Economic Bulletin, Bank of Greece, issue 33, pages 79-90, May.
    20. Heather Gibson & Hiona Balfoussia, 2010. "The impact of nominal and real uncertainty on macroeconomic aggregates in Greece," Economic Bulletin, Bank of Greece, issue 34, pages 57-71, September.
    21. Sophia Lazaretou, 2014. "The smart economy: cultural and creative industries in Greece: can they be a way out of the crisis?," Economic Bulletin, Bank of Greece, issue 39, pages 73-103, July.

    More about this item

    Keywords

    Mergers and acquisitions; event study analysis; abnormal returns;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • 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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