Wealth Effects Of Bank Mergers And Acquisitions In Asian Emerging Markets

Abstract

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoHeader"><span style="color: black; font-size: 10pt; mso-fareast-font-family: SimSun; mso-themecolor: text1; mso-fareast-language: ZH-CN;"><span style="font-family: Times New Roman;">Through analysis of stock responses to two different types of banking M&A deals, specifying M&A and diversifying M&A, we find that specifying M&A deals incur positive cumulative abnormal returns (CAR) in both two-day and three-day windows without controlling for firm size. Diversifying M&A deals incur positive CAR in two different event windows. However, the differences between the two windows are not statistically significant. Contrary to previous studies on M&A in the banking industry of developed markets, the results of our study indicate that markets do not distinguish among various types of M&A deals in the banking industry around the date of announcement. Diversifying M&A generate positive three-day CARs but they are not significantly better than specifying M&A.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>