What drives cross-border M&As in commercial banking?

Mohamed Galamhussen, Jean-Francois Hennart, Carlos Manuel Pinheiro

Research output: Contribution to journalArticleScientificpeer-review

6 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)S6-S18
JournalJournal of Banking and Finance
Volume72
DOIs
Publication statusPublished - Nov 2016

Keywords

  • international banking
  • market entry
  • banks
  • mergers and acquisitions

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