The Impact of Cross-Border Acquisitions on Target Banks’ Performance in an Institutionally Poor Environment: Ukraine’s Takeover Wave

Post-Communist Economies, Vol. 31, Nr. 3, 396-417, 2019

Posted: 19 Apr 2019

See all articles by Muzaffar Olimjonovich Ahunov

Muzaffar Olimjonovich Ahunov

Endicott College, Woosong University

Leo Van Hove

Vrije Universiteit Brussel (VUB)

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE)

Date Written: March 29, 2019

Abstract

We investigate the impact of the 2005-2007 cross-border bank takeovers in Ukraine – a country with poor institutional quality – on the performance of the target banks. Because acquirers targeted mainly larger, less-capitalised banks, we control for selection bias by combining propensity score matching and a difference-in-difference methodology. We find that the cost efficiency of the acquired banks improved after takeover (because of a decreased reliance on deposits), but that neither their profitability nor their loan market shares increased. Overall, our findings tally only piecemeal with the existing multi-country studies for transition economies. This argues in favour of additional single-country research.

Keywords: cross-border takeovers; bank performance; weak institutions; selection bias

Suggested Citation

Ahunov, Muzaffar Olimjonovich and Van Hove, Leo and Jegers, Marc, The Impact of Cross-Border Acquisitions on Target Banks’ Performance in an Institutionally Poor Environment: Ukraine’s Takeover Wave (March 29, 2019). Post-Communist Economies, Vol. 31, Nr. 3, 396-417, 2019. Available at SSRN: https://ssrn.com/abstract=3363577

Muzaffar Olimjonovich Ahunov (Contact Author)

Endicott College, Woosong University ( email )

27 Baengnyong-ro 57beon-gil
Jayang-dong, Daejeon
Korea, Republic of (South Korea)

Leo Van Hove

Vrije Universiteit Brussel (VUB) ( email )

Department of Applied Economics (APEC)
Pleinlaan 5
Brussels, B-1050
Belgium
+32 2 614 84 49 (Phone)

HOME PAGE: http://research.vub.ac.be/applied-economics/members

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE) ( email )

Brussels
Belgium
+32-2-629 21 13 (Phone)
+32-2-629 22 82 (Fax)

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