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The impact of cross-border acquisitions on target banks’ performance in an institutionally poor environment: Ukraine’s takeover wave

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  • Muzaffarjon Ahunov
  • Leo Van Hove
  • Marc Jegers

Abstract

We investigate the impact of the 2005–2007 cross-border bank takeovers in Ukraine – a country with poor institutional quality – on the performance of the target banks. Because acquirers targeted mainly larger, less-capitalised banks, we control for selection bias by combining propensity score matching and a difference-in-difference methodology. We find that the cost efficiency of the acquired banks improved after takeover (because of a decreased reliance on deposits), but that neither their profitability nor their loan market shares increased. Overall, our findings tally only piecemeal with the existing multi-country studies for transition economies. This argues in favour of additional single-country research.

Suggested Citation

  • Muzaffarjon Ahunov & Leo Van Hove & Marc Jegers, 2019. "The impact of cross-border acquisitions on target banks’ performance in an institutionally poor environment: Ukraine’s takeover wave," Post-Communist Economies, Taylor & Francis Journals, vol. 31(3), pages 396-417, May.
  • Handle: RePEc:taf:pocoec:v:31:y:2019:i:3:p:396-417
    DOI: 10.1080/14631377.2018.1537739
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    File URL: http://hdl.handle.net/10.1080/14631377.2018.1537739
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