Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure

Nazim Ullah, Fauzias Mat Nor, Junaidah Abu Seman, Ahmed Fadly and Nur Ainna

MPRA Paper from University Library of Munich, Germany

Abstract: Merger and acquisition known as a market expansion strategy. This paper examines several factors associated with M&A namely bank size, intermediary role, modes of financing, bank-specific variables, and macro-economic variables on the operational performance and stability along with the mediation role of market structure for Islamic banks. This paper employs panel data techniques and SEM to analyse a set of unbalanced panel samples of 10 Islamic banks during 2004Q1 to 2020Q4 from six countries, namely Qatar, Kuwait, Saudi Arabia, United Arab Emirate, Bahrain, and Pakistan. The results indicate that M&A improve post-M&A performance of Islamic banks while stability does not improve. Interestingly, there is no mediation effects of market structure on the relationship between M&A, operational performance, and stability. Policymakers should emphasis M&A towards the Islamic bank, however, to be stable, it may take more than 5 years.

Keywords: Merger and Acquisition (M&A); operational performance; bank stability; market structure; Islamic banks. (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2023-03-02
New Economics Papers: this item is included in nep-ara, nep-com, nep-hme and nep-isf
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