Cross-Border Bank Mergers: What Lures the Rare Animal?

30 Pages Posted: 12 Aug 2001

See all articles by Claudia M. Buch

Claudia M. Buch

Deutsche Bundesbank

Gayle L. DeLong

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Date Written: February 2002

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

JEL Classification: F21, G21

Suggested Citation

Buch, Claudia M. and DeLong, Gayle L., Cross-Border Bank Mergers: What Lures the Rare Animal? (February 2002). Available at SSRN: https://ssrn.com/abstract=279312 or http://dx.doi.org/10.2139/ssrn.279312

Claudia M. Buch

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Gayle L. DeLong (Contact Author)

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

One Bernard Baruch Way
Box B 10-225
New York, NY 10010
United States
646-312-3493 (Phone)
646-312-3451 (Fax)

HOME PAGE: http://faculty.baruch.cuny.edu/gdelong

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