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The effect of merger and acquisition announcement on Greek bank stock returns

Author

Listed:
  • Panayiotis P. Athanasoglou

    (Bank of Greece)

  • Ioannis G. Asimakopoulos

    (Bank of Greece)

  • Evangelia A. Georgiou

    (Bank of Greece)

Abstract

This study examines the response of Greek bank stock prices to the announcement of intended mergers and acquisitions (M&As) during the period 1998-1999, applying a standard event study methodology. The results show that both the acquiring banks and, albeit to a lesser extent, the target banks experience significant positive abnormal stock returns that last for a few days around the announcement date. These returns are more evident in the period before the announcement thus indicating either that rumours circulate or that inside information is being abused. The efficient market hypothesis in its semi-strong form seems to be violated for the period under examination, as abnormal returns remain evident for several days after the announcement date.

Suggested Citation

  • Panayiotis P. Athanasoglou & Ioannis G. Asimakopoulos & Evangelia A. Georgiou, 2005. "The effect of merger and acquisition announcement on Greek bank stock returns," Economic Bulletin, Bank of Greece, issue 24, pages 27-44, January.
    • Handle: RePEc:bog:econbl:y:2005:i:24:p:27-44
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Mergers and acquisitions; event study analysis; abnormal returns;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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