Kiel Working Papers, Kiel Institute for World Economics
No 1070:
Cross-Border Bank Mergers: What Lures the Rare Animal?
Claudia M. Buch and Gayle L. DeLong
Abstract: Although domestic mergers and acquisitions (M&As) in the
financial services industry have increased steadily over the past two
decades, international M&As were relatively rare until recently. This paper
uses a novel dataset of over 2,300 mergers that took place between 1978 and
2001 to analyse the determinants of international bank mergers. We test the
extent to which information costs and regulations hold back merger
activity. Our results suggest that banks operating in more regulated
environments are less likely to be the targets of international bank
mergers. Hence, the lifting of regulations can spur growth in cross-border
bank mergers. Also, mergers tend to be less frequent if information costs
are high.
Keywords: cross-border banking, information costs, regulations, mergers and acquisitions; (follow links to similar papers)
JEL-Codes: F21; G21; (follow links to similar papers)
36 pages, August 2001
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