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What drives cross-border M&As in commercial banking?
Gulamhussen, Mohamed Azzim Hennart, Jean-François Pinheiro, Carlos Manuel
Gulamhussen, Mohamed Azzim
Hennart, Jean-François
Pinheiro, Carlos Manuel
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2016-11
Journal
Journal of Banking & Finance
Book
Publication Volume
72
Publication Issue
November 2016 Suppl
Publication Begin page
S6
Publication End page
S18
Publication Number of pages
Collections
Abstract
Using a gravity model, we analyze the determinants of the probability that commercial banks in 89 acquiring countries and 118 target countries will undertake M&As over a 30-year period (1981–2010) and of the value of these M&As. We find that the value of cross-border M&As increases with the size of the acquiring country, and that both the probability and value of M&As vary positively with the depth of the financial market in acquirer countries and the presence of corporate and non-corporate customers from acquiring countries in target countries, and negatively with the geographic, psychic, and time zone distances between acquirer and target countries. Our study highlights the role of non-corporate customers and of psychic distance in the cross-border expansion of commercial banks through M&As.
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Keywords
3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour