What drives cross-border M&As in commercial banking?

Mohamed Azzim Gulamhussen, Jean-Francois Hennart and Carlos Manuel Pinheiro

Journal of Banking & Finance, 2016, vol. 72, issue S, S6-S18

Abstract: Using a gravity model, we analyze the determinants of the probability that commercial banks in 89 acquiring countries and 118 target countries will undertake M&As over a 30-year period (1981–2010) and of the value of these M&As. We find that the value of cross-border M&As increases with the size of the acquiring country, and that both the probability and value of M&As vary positively with the depth of the financial market in acquirer countries and the presence of corporate and non-corporate customers from acquiring countries in target countries, and negatively with the geographic, psychic, and time zone distances between acquirer and target countries. Our study highlights the role of non-corporate customers and of psychic distance in the cross-border expansion of commercial banks through M&As.

Keywords: International banking; Market entry; Banks; Mergers and acquisitions (search for similar items in EconPapers)
JEL-codes: F21 F23 G21 G34 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:72:y:2016:i:s:p:s6-s18

DOI: 10.1016/j.jbankfin.2016.07.007

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