Impact of the Financial Crisis on Cross-Border Mergers and Acquisitions and Concentration in the Global Banking Industry

Rao-Nicholson, Rekha; Salaber, Julie

Abstract

© 2015 Wiley Periodicals, Inc. The global banking industry has seen dramatic changes in the past 40 years. Most recently, the financial liberalization of emerging markets and the global financial crisis have significantly impacted the market share of banks worldwide. This article investigates the impact of the 2007-2008 financial crisis on cross-border mergers and acquisitions (M&As) in the banking sector and emphasizes the role of emerging-market banks in the postcrisis consolidation trend. Using M&A data and concentration data over the period 2000-2013, our analysis indicates that the financial crisis had a significant impact on worldwide M&As, especially on the direction of the transactions. Emerging-market banks appear to be major acquirers in the postcrisis period, targeting both neighboring countries and developed economies in Europe. We also observe an increase in bank concentration in developed markets most hit by the financial crisis, especially in the United States and the United Kingdom, whereas bank concentration decreased in emerging markets.

Citation

Rao-Nicholson, R., & Salaber, J. (2016). Impact of the Financial Crisis on Cross-Border Mergers and Acquisitions and Concentration in the Global Banking Industry. Thunderbird International Business Review, 58(2), 161-173. https://doi.org/10.1002/tie.21731

• Journal Article Type: Article
• Online Publication Date: Jun 21, 2015
• Publication Date: Mar 1, 2016
• Deposit Date: May 7, 2015
• Publicly Available Date: Jun 21, 2016
• Journal: Thunderbird International Business Review
• Print ISSN: 1520-6874
• Electronic ISSN: 1520-6874
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 58
• Issue: 2
• Pages: 161-173
• DOI: https://doi.org/10.1002/tie.21731
• Keywords: banking concentration, globalization, mergers and acquisitions, financial crisis, emerging markets
• Public URL: https://uwe-repository.worktribe.com/output/910815
• Publisher URL: http://dx.doi.org/10.1002/tie.21731