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The effect of mergers and acquisitions on productivity: An empirical application to Spanish banking

Author

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  • Bernad, Cristina
  • Fuentelsaz, Lucio
  • Gómez, Jaime

Abstract

Mergers and acquisitions are frequently justified in terms of value creation or efficiency improvements. Nevertheless, the evidence is not consistent with the existence of benefits in terms of the costs, productivity, profitability or market value of the firms involved. A distinguishing feature of extant research is that it focuses on the assessment of the consequences of mergers around the time in which the operation takes place, limiting the possibility of observing a complete integration between the merged firms. In this context, the objective of this paper is to evaluate the effects of mergers and acquisitions on the long-run productivity of Spanish savings banks. Our results show that productivity improvements can be found in only half of the mergers that take place during the period analyzed.

Suggested Citation

  • Bernad, Cristina & Fuentelsaz, Lucio & Gómez, Jaime, 2010. "The effect of mergers and acquisitions on productivity: An empirical application to Spanish banking," Omega, Elsevier, vol. 38(5), pages 283-293, October.
    • Handle: RePEc:eee:jomega:v:38:y:2010:i:5:p:283-293
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    5. Dionysios Polemis & Thanasis Karlis, 2016. "Measuring Post-Merger and Acquisition Performance of Corporations in the Maritime Transport Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(3), pages 83-93, July-Sept.
    6. Al-Khasawneh, Jamal Ali & Essaddam, Naceur & Hussain, Tashfeen, 2020. "Total productivity and cost efficiency dynamics of US merging banks: A non-parametric bootstrapped analysis of the fifth merger wave," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 199-211.
    7. Lee, Peter K.C. & Cheng, T.C. Edwin & Yeung, Andy C.L. & Lai, Kee-hung, 2011. "An empirical study of transformational leadership, team performance and service quality in retail banks," Omega, Elsevier, vol. 39(6), pages 690-701, December.
    8. Jaime Gómez & Raquel Orcos & Sergio Palomas, 2014. "The evolving patterns of competition after deregulation: the relevance of institutional and operational factors as determinants of rivalry," Journal of Evolutionary Economics, Springer, vol. 24(4), pages 905-933, September.
    9. Toumi Hassen & Issaoui Fakhri & Ammouri Bilel & Touili Wassim & Hamdi Faouzi, 2018. "Dynamic Effects of Mergers and Acquisitions on the Performance of Commercial European Banks," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 1032-1048, September.
    10. Grifell-Tatjé, E., 2011. "Profit, productivity and distribution: Differences across organizational forms - The case of Spanish banks," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 72-83, June.

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