Abstract

This study empirically examines the effects of the Asian banks’ M&A, focusing on the long-term changes in banking management strategies for the acquirer banks. Target countries have tighter/more stringent legal and regulatory rules to ensure that the acquirer banks enjoy higher equity at lower cost. We find that Asian banks’ M&As contribute toward increasing new loans and enhancing capital adequacy. However, banks fail to make profits because of the non-performing loans. Most importantly, as part of cross-border deals, strong legal systems and stringent regulations could enable Asian banks to operate effectively by undertaking M&A between countries with different economic systems.

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