Are Domestic and Cross-Border M&As Different? Cross-Country Evidence From the Banking Sector

27 Pages Posted: 4 Aug 2009 Last revised: 21 May 2011

See all articles by Stefano Caiazza

Stefano Caiazza

Università degli Studi di Roma Tor Vergata - Dipartimento di Economia e Finanza

Alberto F. Pozzolo

Università degli Studi di Roma Tre

Giovanni Trovato

University of Rome Tor Vergata - Faculty of Economics

Date Written: August 4, 2009

Abstract

Are the drivers of domestic and cross-border M&As in the banking sector different? Despite the intense research on bank M&As in the last decade, the attention paid to this issue is surprisingly limited. We fill this gap studying the ex-ante determinants of national and international acquisitions in the banking sector in an unbalanced panel of nearly 1,000 banks from 50 world countries, from 1992 to 2007. Our results show that size and profitability have a stronger impact on the probability that a bank is a bidder in a cross-border deal than in a domestic deal. Consistent with the findings of the literature on the determinants of the internationalization of manufacturing firms, international expansion in the banking sector is therefore easier for countries with a number of large “national champions”, that are more capable to overcome the fixed costs of internationalization and have a stronger incentive to diversify the idiosyncratic risks of their domestic activities.

Keywords: M&As, bank, bank internationalization.

JEL Classification: G15, G21, G34

Suggested Citation

Caiazza, Stefano and Pozzolo, Alberto F. and Trovato, Giovanni, Are Domestic and Cross-Border M&As Different? Cross-Country Evidence From the Banking Sector (August 4, 2009). Available at SSRN: https://ssrn.com/abstract=1443919 or http://dx.doi.org/10.2139/ssrn.1443919

Stefano Caiazza (Contact Author)

Università degli Studi di Roma Tor Vergata - Dipartimento di Economia e Finanza ( email )

Via Columbia 2
Roma, Roma 00100
Italy

Alberto F. Pozzolo

Università degli Studi di Roma Tre ( email )

Via Ostiense 163
Roma, RM 00154
Italy

HOME PAGE: http://www.uniroma3.it/

Giovanni Trovato

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

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