Banking market consolidation in Asia: Evidence from acquirers, targets, and rivals

Forthcoming International Journal of Finance & Economics

55 Pages Posted: 15 Jun 2016 Last revised: 11 Jun 2024

See all articles by Sascha Kolaric

Sascha Kolaric

University of Edinburgh Business School; Technical University of Darmstadt

Florian Kiesel

Free University of Bolzano-Bozen

Dirk Schiereck

Technical University of Darmstadt

Date Written: December 1, 2023

Abstract

We analyze the financial sector consolidation in Asia by using a comprehensive sample of bank M&As from 1995 to 2021. Our results show that M&A announcements by Asian domestic ac-quirers are associated with significant positive stock price returns to both acquirers and their ri-vals. In contrast, cross-border acquirers and their rivals experience negative but insignificant re-turns, while targets and their rivals record gains, regardless whether it is a domestic or cross-border transaction. Further analyses reveal that domestic acquirers obtaining larger relative in-creases in their market share benefit the most, indicating that market power considerations are the primary driver behind acquirers' positive returns. For cross-border acquirers, neither cultural dif-ferences nor regulatory arbitrage considerations can explain return patterns surrounding M&A announcements.

Keywords: Banks, Emerging markets, Rival market reactions, Market consolidation, Market power, Mergers and acquisitions (M&As)

JEL Classification: G14, G21, G34, F23

Suggested Citation

Kolaric, Sascha and Kiesel, Florian and Schiereck, Dirk, Banking market consolidation in Asia: Evidence from acquirers, targets, and rivals (December 1, 2023). Forthcoming International Journal of Finance & Economics
, Available at SSRN: https://ssrn.com/abstract=2795651 or http://dx.doi.org/10.2139/ssrn.2795651

Sascha Kolaric (Contact Author)

University of Edinburgh Business School ( email )

29 Buccleuch Place
Edinburgh, EH8 9JS
United Kingdom

Technical University of Darmstadt ( email )

Hochschulstrasse 1
Darmstadt, 64289
Germany

HOME PAGE: http://www.cofi.wi.tu-darmstadt.de/team_cofi/lehrbeauftragte_2/sascha_kolaric/index.en.jsp

Florian Kiesel

Free University of Bolzano-Bozen ( email )

Piazza Universita 1
Bolzano, 39100
Italy

Dirk Schiereck

Technical University of Darmstadt ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

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