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Mergers and Long‐Term Corporate Performance: Evidence from Cross‐Border Bank Acquisitions

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  • DONALD R. FRASER
  • HAO ZHANG

Abstract

We provide evidence on operating performance changes at a sample of U.S. banks acquired by non‐U.S. banking organizations over the 1980–2001 period. Our sample allows us to compare directly the preacquisition performance of the targets with their postacquisition performance, a comparison that has not been possible in prior studies. We find that these cross‐border acquisitions produce improved target performance. Cash flow profitability at the target increases, labor utilization improves, and loan losses do not rise. We also find evidence that the improvement in target operating performance primarily takes place for those acquisitions that occur following passage of the Reigle–Neal interstate branching legislation.

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  • Donald R. Fraser & Hao Zhang, 2009. "Mergers and Long‐Term Corporate Performance: Evidence from Cross‐Border Bank Acquisitions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(7), pages 1503-1513, October.
    • Handle: RePEc:wly:jmoncb:v:41:y:2009:i:7:p:1503-1513
    DOI: 10.1111/j.1538-4616.2009.00265.x
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    1. Thiago Sousa Barros & Julián Cárdenas & Wesley Mendes-Da-Silva, 2021. "The effect of interlocking directorates on mergers and acquisitions in Brazil," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 811-839, September.
    2. Brian Bolton, 2020. "Internal vs. External Corporate Social Responsibility at U.S. Banks," IJFS, MDPI, vol. 8(4), pages 1-28, October.
    3. Puja Aggarwal & Sonia Garg, 2022. "Impact of Mergers and Acquisitions on Accounting-based Performance of Acquiring Firms in India," Global Business Review, International Management Institute, vol. 23(1), pages 218-236, February.

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