Determinants of domestic and cross-border bank acquisitions in the European Union

Ignacio Hernando, María Nieto () and Larry Wall
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María Nieto: Banco de España

No 823, Working Papers from Banco de España

Abstract: This paper analyzes the determinants of bank acquisitions both within and across countries in the EU-25 over the period 1997-2004. The findings of this paper are broadly in line with those of the academic literature on the subject, which are mainly based on the US experience. Our results suggest poorly managed EU-25 banks (high cost to income) are more likely to be acquired by other EU-25 banks, in the same country. Nevertheless, this underperformance of target banks does hold for cross border bank acquisitions only if compared to the median of the market. Larger banks are more likely to be acquired by other banks in the same country. The probability of being acquired by another bank in the same market is larger for banks that are quoted in the stock market, which is consistent with the disciplinary character of listing in the stock markets. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks operating within the same country but are more likely to be acquired by banks in other EU-25 countries.

Keywords: bank acquisitions; merger gains; probability of acquisition (search for similar items in EconPapers)
JEL-codes: G21 G34 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2008-11
New Economics Papers: this item is included in nep-ban, nep-bec, nep-com and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/08/Fic/dt0823e.pdf First version, November 2008 (application/pdf)

Related works:
Journal Article: Determinants of domestic and cross-border bank acquisitions in the European Union (2009)
Working Paper: Determinants of domestic and cross-border bank acquisitions in the European Union (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0823

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