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Cross-Border Bank Acquisitions: Is there a Performance Effect?

  • Ricardo Correa

    ()

This paper uses a unique database that includes deal and bank balance sheet information for 220 cross-border acquisitions between 1994 and 2003 to analyze the characteristics and performance effects of international takeovers on target banks. A discrete choice estimation shows that banks are more likely to get acquired in a cross-border deal if they are large, bad performers, in a small country, and when the banking sector is concentrated. Post-acquisition performance for target banks does not improve in the first two years relative to domestically-owned financial institutions. This result is explained by a decrease in the banks' net interest margin in developed countries and an increase in overhead costs in emerging economies.

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File URL: http://hdl.handle.net/10.1007/s10693-008-0043-6
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Article provided by Springer in its journal Journal of Financial Services Research.

Volume (Year): 36 (2009)
Issue (Month): 2 (December)
Pages: 169-197

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Handle: RePEc:kap:jfsres:v:36:y:2009:i:2:p:169-197
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102934

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