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What drives cross-border M&As in commercial banking?
Gulamhussen, Azzim Hennart, Jean-François Pinheiro, Jean-François Manuel, Carlos Pinheiro, Carlos
Gulamhussen, Azzim
Hennart, Jean-François
Pinheiro, Jean-François
Manuel, Carlos
Pinheiro, Carlos
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2016
Journal
Journal of Banking and Finance
Book
Publication Volume
72
Publication Issue
November 2016 Suppl
Publication Begin page
S6
Publication End page
S18
Publication NUmber of pages
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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
International Banking, Mergers & Acquisitions, Market Entry, Banks