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How Did the Asian Stock Markets React to Bank Mergera after the 1997 Financial Crisis?

Author

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  • Céline Meslier-Crouzille

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Laetitia Lepetit

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Carlos C. Bautista

    (College of Business Administration - UP System - University of the Philippines)

Abstract

The objective of this paper is to empirically assess the stock market reaction to the announcement of bank mergers and acquisitions (M&As) in eight East Asian countries over the 1997-2003 period. M&As are classified according to the status of entity, the time period of the deal and the maturity of the banking system. A bivariate GARCH model is used to estimate abnormal returns taking beta conditional variability into account. We find that the market reacted negatively to M&As during the crisis period (1997-2000) and also in the less mature banking systems (Indonesia, Malaysia, the Philippines, South Korea and Thailand).

Suggested Citation

  • Céline Meslier-Crouzille & Laetitia Lepetit & Carlos C. Bautista, 2008. "How Did the Asian Stock Markets React to Bank Mergera after the 1997 Financial Crisis?," Post-Print hal-00828518, HAL.
    • Handle: RePEc:hal:journl:hal-00828518
    DOI: 10.1111/j.1468-0106.2008.00395.x
    Note: View the original document on HAL open archive server: https://unilim.hal.science/hal-00828518
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    References listed on IDEAS

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    Cited by:

    1. Pasiouras, Fotios & Gaganis, Chrysovalantis & Zopounidis, Constantin, 2010. "Multicriteria classification models for the identification of targets and acquirers in the Asian banking sector," European Journal of Operational Research, Elsevier, vol. 204(2), pages 328-335, July.
    2. Fadzlan Sufian & Fakarudin Kamarudin, 2017. "Forced Mergers on Bank Efficiency and Productivity: Evidence from Semi-parametric Malmquist Productivity Index," Global Business Review, International Management Institute, vol. 18(1), pages 19-44, February.
    3. Madhumita Chakraborty, 2010. "The Wealth Effects of Takeover Announcement for Firms in the Financial Services Sector in India," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 9(2), pages 199-227, August.
    4. repec:dgr:rugsom:14029-eef is not listed on IDEAS
    5. Vanwalleghem, Dieter & Yildirim, Canan & Mukanya, Anthony, 2020. "Leveraging local knowledge or global advantage: Cross border bank mergers and acquisitions in Africa," Emerging Markets Review, Elsevier, vol. 42(C).

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