IDEAS home Printed from https://ideas.repec.org/a/eme/ijoesp/ijoes-10-2018-0147.html
   My bibliography  Save this article

Does positive relationship exist between bank mergers and asset turnover?

Author

Listed:
  • Hassan Yusuf
  • Lukman Raimi

Abstract

Purpose - This study aims to examine the nature of relationship that exists between merger and acquisition (M&A) and banks’ asset turnover (AT) following M&As that took place during the 2004 and 2008 banking sector reforms. Design/methodology/approach - Considering the fact that this study is empirical, the authors adopted the quantitative research method relying on financial industry data. Being a matched-sample comparison, the study evaluated whether the merged banks outperformed the stand-alone banks as a result of their involvement in M&As. Using data extracted from the annual financial reports of the banks, mean AT ratios were computed. Chow test for structural break, paired sample and independent samplet-tests were performed on the mean AT ratios to gauge the impact of M&A. Findings - The findings suggest that there is no positive relationship between M&A and banks’ AT as either the AT ratios of the banks deteriorated or at best, did not improve significantly. Furthermore, the evidence suggests that the stand-alone banks outperformed the merged banks following M&As in Nigeria. Practical implications - The major practical implication of this empirical study is that M&A has not been able to solve the fundamental problems of banks in Nigeria. Apart from improving their liquidity constraints, the unresolved problems of banks in Nigeria include poor corporate governance compliance, poor credit risk management policy and ineffective allocation of capital to businesses. Originality/value - This study supports the Keynesian argument for effective regulation supervision and control of the economy in general and financial institutions.

Suggested Citation

  • Hassan Yusuf & Lukman Raimi, 2019. "Does positive relationship exist between bank mergers and asset turnover?," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 35(1), pages 133-147, January.
  • Handle: RePEc:eme:ijoesp:ijoes-10-2018-0147
    DOI: 10.1108/IJOES-10-2018-0147
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJOES-10-2018-0147/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJOES-10-2018-0147/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1108/IJOES-10-2018-0147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijoesp:ijoes-10-2018-0147. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.