Geographic strategies in mergers and acquisitions by financial institutions

Jennifer Brodmann, Charles Armah Danso and Thanh Ngo

Accounting and Finance, 2022, vol. 62, issue 3, 3319-3363

Abstract: We examine the impacts of geographic strategy of mergers and acquisitions by financial institutions on their short‐run and long‐run stock price performance, risk, and operating performance. The geographic strategies include ‘in‐market,’ ‘partial‐overlapping,’ and ‘market‐expanding’ acquisitions. While the market initially reacts more favourably towards ‘market‐expanding’ acquisitions, acquirers in these acquisitions experience the lowest long‐run stock price performance and largest increase in total return volatility and idiosyncratic risk. Acquirers in partial‐overlapping acquisitions experience the most deterioration in operating performance. Our results are robust to different measures of geographic expansion and subsample analysis. These findings have geographic implications for the banking industry regarding expansion through acquisition.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/acfi.12888

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:62:y:2022:i:3:p:3319-3363

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is currently edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().