The Determinants of Takeovers: Recent Evidence from U.S. Thrifts

25 Pages Posted: 3 Nov 2008

See all articles by Fatma Cebenoyan

Fatma Cebenoyan

City University of New York, CUNY Hunter College - Department of Economics

A. Sinan Cebenoyan

Hofstra University - Frank G. Zarb School of Business; New York University (NYU) - Department of Finance

Elizabeth S. Cooperman

University of Colorado Denver

Multiple version iconThere are 2 versions of this paper

Date Written: December 2002

Abstract

This paper uses a two-step methodology to examine the relationship between managerial cost inefficiency and the takeover of U.S. thrifts during a period of market liberalization and widespread takeover activity, 1994 to 2000. In the first stage using stochastic cost frontiers, we estimate controllable managerial cost inefficiency scores for all stock firms operating each year in 1994 to 2000. In a second stage, we use these scores to examine correlates of takeovers, focusing on cost inefficiency. For takeovers by banks, we find a significant negative relationship between cost inefficiency and takeover, suggesting an exit of more cost efficient firms from the thrift industry during this period. However, takeovers by thrifts are associated with other characteristics.

Keywords: Cost Inefficiency, Depository Institutions, Thrifts, Takeovers

Suggested Citation

Cebenoyan, Fatma and Cebenoyan, Ahmet Sinan and Cooperman, Elizabeth S., The Determinants of Takeovers: Recent Evidence from U.S. Thrifts (December 2002). NYU Working Paper No. FIN-02-058, Available at SSRN: https://ssrn.com/abstract=1294430

Fatma Cebenoyan (Contact Author)

City University of New York, CUNY Hunter College - Department of Economics ( email )

695 Park Avenue
New York, NY 10021
United States

Ahmet Sinan Cebenoyan

Hofstra University - Frank G. Zarb School of Business ( email )

Dept. of Finance
Hempstead, NY 11549
United States
516-463-5702 (Phone)

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

Elizabeth S. Cooperman

University of Colorado Denver ( email )

Campus Box 165, P.O. Box 173364
Denver, CO 80217
United States
303-315-8422 (Phone)
303-315-8084 (Fax)

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