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Determinants of Bank M&As in Central and Eastern Europe

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  • Alin Marius Andrieș

    (Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi and Institute for Economic Forecasting, Romanian Academy, 700505 Iasi, Romania)

  • Sabina Cazan

    (Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 700505 Iasi, Romania)

  • Nicu Sprincean

    (Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, 700505 Iasi, Romania)

Abstract

This paper analyzes the determinants of bank mergers and acquisitions (M&As) from a bank-level perspective. The main objective of the study is to identify those mutual characteristics of all banking institutions from Central and Eastern Europe that are prone to be acquired versus acquirer, or national versus cross-border. Using a database of more than 200 M&As transactions between 2000 and 2018 within Central and Eastern Europe, we document the main characteristics that influence the decision of merging, including the size of the bank, profitability, lending activities, liquidity, bank concentration, banking system stability, government effectiveness, regulatory quality, and the level of inflation. Higher effective average tax rate, which is associated with reduced tax avoidance, influences banks in a positive manner to be involved in the M&A process, findings that hold for targeted banks and domestic transactions. Furthermore, the analysis highlights the changes the financial crisis has projected on investors’ behavior.

Suggested Citation

  • Alin Marius Andrieș & Sabina Cazan & Nicu Sprincean, 2021. "Determinants of Bank M&As in Central and Eastern Europe," JRFM, MDPI, vol. 14(12), pages 1-19, December.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:12:p:621-:d:706932
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    References listed on IDEAS

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    7. Bremus, Franziska & Schmidt, Kirsten & Tonzer, Lena, 2018. "Interactions between regulatory and corporate taxes: How is bank leverage affected?," IWH Discussion Papers 16/2018, Halle Institute for Economic Research (IWH).
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    Cited by:

    1. Jian Huang & Han Yu & Zhen Zhang, 2023. "External vs. In-House Advising Service: Evidence from the Financial Industry Acquisitions," JRFM, MDPI, vol. 16(2), pages 1-21, January.

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