Impact of the Financial Crisis on Banking Acquisitions: A Look at Shareholder Wealth

Rao-Nicholson, Rekha; Salaber, Julie

Abstract

© 2015, © 2015 International Journal of the Economics of Business. Abstract: This paper examines the influence of the 2007–08 financial crisis on value creation for acquirer’s shareholders in the banking industry using a sample of 883 deals over 2004–12. Applying an exploratory and top-down approach, banking acquisitions are considered at the global level, narrowing the analysis step by step to consider domestic versus cross-border acquisitions. Then cross-border deals are split based on the economic development of the acquirer and target countries. It is observed that only acquisitions involving emerging-economy acquirers and developed-economy targets generate positive and significant returns to shareholders after the crisis. Major changes in the global acquisition landscape are also observed since 2007, with emerging-economy banks increasing their acquisition activity, both nationally and internationally.

Citation

Rao-Nicholson, R., & Salaber, J. (2015). Impact of the Financial Crisis on Banking Acquisitions: A Look at Shareholder Wealth. International Journal of the Economics of Business, 22(1), 87-117. https://doi.org/10.1080/13571516.2014.982901

• Journal Article Type: Article
• Publication Date: Jan 1, 2015
• Journal: International Journal of the Economics of Business
• Print ISSN: 1357-1516
• Electronic ISSN: 1466-1829
• Publisher: Taylor & Francis (Routledge)
• Peer Reviewed: Peer Reviewed
• Volume: 22
• Issue: 1
• Pages: 87-117
• DOI: https://doi.org/10.1080/13571516.2014.982901
• Keywords: banking sector, acquisitions, emerging economies, financial crisis, shareholder returns
• Public URL: https://uwe-repository.worktribe.com/output/844106
• Publisher URL: http://dx.doi.org/10.1080/13571516.2014.982901