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Cherry Picking or Driving Out Bad Management: Foreign Acquisitions in Turkish Banking

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  • Canan Yildirim

    ()

    (Department of International Finance, Kadir Has University)

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    This paper analyzes the determinants of cross-border acquisitions and the impact of foreign acquisitions on performance in the Turkish banking sector. The results suggest that foreign banks target relatively better performing banks to acquire, and that post-acquisition performance of the targets does not improve. There is some evidence that both established and newly acquired foreign banks focus on expanding their market shares. Concerning static-ownership effects, the results also show that, in general, foreign-owned and state-owned banks perform as well as private-owned domestic banks. The only exception is with respect to non-performing loans, in that state-owned banks seem to suffer from asset quality problems.

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    Paper provided by Economic Research Forum in its series Working Papers with number 568.

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    Length: 20
    Date of creation: 11 Jan 2010
    Date of revision: 11 Jan 2010
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:568
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