Abstract

This study empirically examines the impact of mergers on performance of the banks in Pakistan. The link between liquidity risk, leverage, capital adequacy, size and performance of merging banks, listed on Karachi Stock Exchange (KSE), which executed at least one merger during 2006-2010 has been discovered using Dougherty model. Moreover, paired t-test has been employed to compare three year pre and post-merger performance of each bank. StataSE Version12, SPSS Version 16 and Microsoft Office Excel 2007 have been used to analyze the data. Regression results show an insignificant impact of mergers on performance of banks and t-test proves that performance of each bidder bank has not improved significantly after mergers.

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