 Microeconomic determinants of acquisitions of Eastern European banks by Western European banks1Gleb Lanine and Rudi Vander Vennet The Economics of Transition, 2007, vol. 15, issue 2, 285-308 Abstract: A considerable number of Western European banks acquired banks in Central and Eastern Europe from the mid‐1990s onwards. The question is whether or not this will improve the efficiency and profitability of the Central and Eastern European banking sectors. We test the relative strength of the efficiency versus the market power hypotheses by investigating the bank‐specific characteristics of the banks involved in the cross‐border acquisitions. We also examine the determinants of the post‐acquisition target banks’ performance. Our results indicate that large Western European banks have targeted relatively large and efficient Central and Eastern European countries (CEEC) banks with an established presence in their local retail banking markets. We find no evidence that cross‐border bank acquisitions in the CEEC are driven by efficiency motivations. The evidence supports the market power hypothesis, raising concerns about the optimal balance between foreign ownership and competition. Date: 2007 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:etrans:v:15:y:2007:i:2:p:285-308 Ordering information: This journal article can be ordered from Access Statistics for this article The Economics of Transition is currently edited by Philippe Aghion and Wendy Carlin More articles in The Economics of Transition from The European Bank for Reconstruction and Development Contact information at EDIRC. |
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