Kola ic, Sascha; Kiesel, Flo ian; Schie eck, Di k
A icle — Published Ve sion
Banking ma ke consolida ion in Asia: E idence om
acqui e s, a ge s, and i als
In e na ional Jou nal o Finance & Economics
P o ided in Coope a ion wi h:
John Wiley & Sons
Sugges ed Ci a ion: Kola ic, Sascha; Kiesel, Flo ian; Schie eck, Di k (2024) : Banking ma ke
consolida ion in Asia: E idence om acqui e s, a ge s, and i als, In e na ional Jou nal o Finance &
Economics, ISSN 1099-1158, John Wiley & Sons, L d., Chiches e , UK, Vol. 30, Iss. 3, pp. 2215-2239,
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RESEARCH ARTICLE
Banking ma ke consolida ion in Asia: E idence om
acqui e s, a ge s, and i als
Sascha Kola ic
1,2
| Flo ian Kiesel
3
| Di k Schie eck
2
1
Uni e si y o Edinbu gh Business School,
Edinbu gh, UK
2
Depa men o Business Adminis a ion,
Economics and Law, Technical Uni e si y
o Da ms ad , Da ms ad , Ge many
3
F ee Uni e si y o Bozen-Bolzano,
Bolzano, I aly
Co espondence
Sascha Kola ic, Uni e si y o Edinbu gh
Business School, 29 Buccleuch Place,
Edinbu gh EH8 9JS, UK.
Email: [email p o ec ed]
Abs ac
We analyse he inancial sec o consolida ion in Asia by using a comp ehen-
si e sample o bank M&As om 1995 o 2021. Ou esul s show ha M&A
announcemen s by Asian domes ic acqui e s a e associa ed wi h signi ican
posi i e s ock p ice e u ns o bo h acqui e s and hei i als. In con as ,
c oss-bo de acqui e s and hei i als expe ience nega i e bu insigni ican
e u ns, while a ge s and hei i als eco d gains, ega dless whe he i is a
domes ic o c oss-bo de ansac ion. Fu he analyses e eal ha domes ic
acqui e s ob aining la ge ela i e inc eases in hei ma ke sha e bene i he
mos , indica ing ha ma ke powe conside a ions a e he p ima y d i e
behind acqui e s' posi i e e u ns. Fo c oss-bo de acqui e s, nei he cul u al
di e ences no egula o y a bi age conside a ions can explain e u n pa e ns
su ounding M&A announcemen s.
KEYWORDS
Banks, Eme ging ma ke s, Ma ke consolida ion, Ma ke powe , me ge s and acquisi ions
(M&As), Ri al ma ke eac ions
1|INTRODUCTION
Consolida ion among inancial ins i u ions has con-
inued almos unaba ed o e he las decades, eshap-
ing he global banking ma ke . This end may
os ensibly be d i en by inc easing compe i ion among
banks and hei desi e o ealize syne gies in he
o m o economies o scale and scope. While syne -
gies may be one po en ial d i e o me ge s and
acquisi ions (M&As), ma ke powe conside a ions
migh also play a p ominen ole in case o me ge s
among inancial ins i u ions (Hanki e al., 2011).
Recen c oss-indus y e idence om he U.S. sugges s
ha indus y concen a ion le els ha e gene ally
been ising, esul ing in inc easingly p o i able M&As
(G ullon e al., 2019).
Ye , he o e all e idence on he in es o pe cep ion o
bank M&As is ambiguous. Ea ly s udies o U.S. and
Eu opean bank me ge s ind ha hese a e gene ally
associa ed wi h posi i e sha eholde weal h e ec s o he
acqui ing bank (e.g., Co ne & De, 1991; Cybo-O one &
Mu gia, 2000; James & Wie , 1987). These signi ican pos-
i i e e ec s, howe e , dissipa e o e ime, and became
ei he insigni ican o e en nega i e (e.g., Beche , 2000;
Hagendo e al., 2008; Hous on & Ryngae , 1994). This
change occu ed while he banking sec o ansi ioned
om ela i ely high le els o ma ke agmen a ion o
inc eased ma ke concen a ion, po en ially acili a ed by
policy changes (e.g., he epeal o he Glass-S eagall Ac
in 1999 in he U.S., inc eased in eg a ion among mos
Eu opean na ions h ough he in oduc ion o he Eu o
as common cu ency s a ing a he end o 1998).
Recei ed: 21 Feb ua y 2023 Re ised: 30 No embe 2023 Accep ed: 25 May 2024
DOI: 10.1002/ij e.3012
This is an open access a icle unde he e ms o he C ea i e Commons A ibu ion License, which pe mi s use, dis ibu ion and ep oduc ion in any medium, p o ided
he o iginal wo k is p ope ly ci ed.
© 2024 The Au ho (s). In e na ional Jou nal o Finance & Economics published by John Wiley & Sons L d.
In J Fin Econ. 2025;30:2215–2239. wileyonlinelib a y.com/jou nal/ij e 2215
Simila ly p ominen policy changes a e, howe e , la gely
absen in Asia. Asian banking ma ke s his o ically had
highe le els o ma ke concen a ion han U.S. and
Eu opean ones, ye he inancial sec o consolida ion in
he egion is s ill p og essing and is se o con inue a a
high pace (The Asian Banke , 2022) This makes Asia an
in e es ing egion o s udy he impac o con inued bank-
ing sec o consolida ion as banks om mo e ma u e
economies a e inc easingly u ning o his egion in
sea ch o g ow h oppo uni ies, while many Asian econo-
mies libe alized hei ma ke s o spu compe i ion and
economic g ow h (Abid e al., 2021; Ba aglia &
Gallo, 2015).
To ully assess he ue impac o he banking ma ke
consolida ion, i is impo an o look beyond he di ec ly
in ol ed ins i u ions and o also conside hei espec-
i e i als. Ye , e y ew s udies exis on he indus y-
wide weal h e ec s o M&As, especially o he inancial
sec o . Gene al, c oss-indus y s udies on i al e ec s o
M&As p edominan ly sugges ha M&As lead o posi-
i e weal h e ec s o i als (e.g., Eckbo, 1985;Song&
Walking, 2000). Hanki e al. (2011) a e he only ones
who assess he impac o U.S. and Eu opean in a-
con inen al bank me ge s and he esul ing weal h
e ec s on i al ins i u ions. Thei esul s sugges ha
ma ke powe conside a ions play a p ominen ole
in explaining e u n pa e ns ollowing M&A
announcemen s.
We le e age bank M&As in Asia o es whe he
domes ic ansac ions ha should inc ease ma ke con-
cen a ion, esul in di e en alua ion e ec s compa ed
o c oss-bo de deals ha a e unlikely o inc ease ma ke
concen a ion. This allows us o d aw conclusions on
whe he ansac ions ha inc ease ma ke
concen a ion—and he e o e ma ke powe
conside a ions—a e he main channel d i ing M&A
e u ns in Asia. Ou analyses consis o wo main pa s.
Fi s , we in es iga e he indus y-wide sha eholde
weal h e ec s o bank M&As in Asia. We look beyond
he acqui ing and a ge ins i u ions and addi ionally
examine he ma ke eac ions o hei espec i e i als. I
ma ke powe conside a ions play a ole in domes ic
Asian bank me ge s, we should no only obse e s ock
p ice gains o domes ic acqui e s, bu also posi i e spill-
o e e ec s o hei i als. Likewise, a ge banks and
hei i als should eco d signi ican sha e p ice
inc eases. Second, we speci ically es whe he ma ke
powe conside a ions a e he main channel h ough
which he obse ed acqui e e u ns a e achie ed and o
wha deg ee c oss-bo de acquisi ions a ec Asian bank-
ing ma ke s. This is suppo ed by addi ional analyses o
he changes in banking ma ke concen a ion le els ol-
lowing me ge s.
U ilizing a da ase o 486 majo i y acquisi ions by
banks in Asia be ween 1995 and 2021, ou esul s show
ha Asian domes ic acqui e s expe ience signi ican
sha e p ice inc eases, while acqui e s in c oss-bo de
ansac ions eco d sligh ly posi i e bu insigni ican
e u ns. Mo eo e , we ind ha i als o c oss-bo de
acqui e s expe ience small losses, while hose o Asian
domes ic acqui e s ob ain signi ican posi i e e u ns.
Ta ge s enjoy posi i e s ock alua ion e ec s, i espec i e
o whe he he bank is he a ge o a domes ic o c oss-
bo de ansac ion. Ou c oss-sec ional eg ession ana-
lyses con i m ha acqui e announcemen e u ns a e
p ima ily d i en by Asian domes ic deals. In line wi h
expec a ions, we obse e a signi ican inc ease in ma ke
concen a ion le els ollowing domes ic acquisi ions, bu
no ollowing c oss-bo de ones. Examining domes ic
Asian bank M&As in de ail, we ind ha pa icula ly
hose domes ic acqui e s bene i ha can ob ain he la g-
es ela i e inc eases in hei ma ke sha e. This esul
emains obus e en when excluding coun ies wi h he
la ges numbe o obse a ions. We addi ionally es
whe he cul u al ac o s o egula o y a bi age conside -
a ions a e po en ial channels ha may explain he e u n
pa e ns obse ed o c oss-bo de bank me ge s, bu we
ind no e idence ha hese play a signi ican ole in
de e mining e u ns o c oss-bo de acqui e s. Taken
oge he , ou empi ical esul s sugges ha ma ke powe
conside a ions a e he dominan d i e o sha eholde
weal h c ea ion in Asian bank me ge s.
Ou s udy con ibu es o he exis ing esea ch on
bank M&As in mul iple ways. Fi s , ou inding o signi i-
can posi i e e u ns o acqui ing banks s ands in con-
as o he majo i y o p io esea ch on me ge s among
inancial ins i u ions in he U.S. and Eu ope
(e.g., Beche , 2000; Hanki e al., 2011). Second, by going
beyond an analysis o he weal h e ec s o acqui e s and
a ge s and also including hei espec i e i als in he
analysis, we ob ain a mo e nuanced pic u e o he consol-
ida ion p ocess. Ou obse a ion o posi i e spillo e
e ec s o he i als o Asian domes ic acqui ing banks
p o ides i s e idence ha ma ke powe conside a ions
seem o play a p ominen ole in local Asian ansac ions.
Addi ionally, by examining he a ge i al e ec s, we
ex end he esea ch on co po a e M&As by Song and
Walking (2000) and Akhigbe and Madu a (1999)
and o e addi ional insigh s in o he banking sec o .
Thi d, we go beyond Hanki e al. (2011) by explici ly
showing ha ma ke concen a ion le els inc ease in he
wake o domes ic bank me ge s and ha he ela i e
changes in an indi idual acqui ing bank's ma ke sha e
appea o be he mos p ominen channel h ough which
acqui e s ealize posi i e alua ion e ec s. O e all, ou
esul s p o ide aluable insigh s in o he inancial sec o
2216 KOLARIC ET AL.
consolida ion in Asia, highligh ing he impo ance ha
ma ke powe conside a ions play in d i ing his p ocess.
The es o he a icle is s uc u ed as ollows.
Sec ion 2p o ides a b ie o e iew o he ela ed li e a-
u e and de elops ou main esea ch hypo heses.
Sec ion 3 epo s he sample selec ion p ocess, p esen s
desc ip i e s a is ics, and explains he empi ical
app oach. Sec ions 4and 5documen he esul s o ou
analyses. Sec ion 6includes addi ional es s while
Sec ion 7concludes.
2|RELATED LITERATURE AND
HYPOTHESES DEVELOPMENT
2.1 |Weal h e ec s o bank M&As
Empi ical esea ch on bank M&As has p edominan ly
ocused on he U.S. and Eu ope. Fo he U.S., he i s
empi ical s udies documen ed posi i e M&A announce-
men e u ns o U.S. acqui ing banks (e.g., Co ne &
De, 1991). This changed o la e s udies, wi h esul s
commonly showing nega i e acqui e e u ns su ound-
ing M&A announcemen s (e.g., Beche , 2000). In con-
as , he combined ins i u ion ea ns posi i e e u ns,
wi h syne ge ic easons appea ing o be one possible
channel explaining he posi i e e u ns (Beche , 2000).
Besides syne ge ic easons, geog aphically ocusing
me ge s also lead o highe e u ns o acqui ing banks
(Co ne e al., 2006; DeLong, 2001). Ta ge s in he
U.S. almos always expe ience signi ican posi i e weal h
e ec s. Fo Eu opean a ge banks a simila pic u e
eme ges as o hei U.S. coun e pa s; hey ea n la ge
and posi i e e u ns su ounding M&A announcemen s
(Cybo-O one & Mu gia, 2000). Howe e , in con as o
mos U.S. s udies, acqui e s do no appea o des oy
sha eholde weal h (Cybo-O one & Mu gia, 2000;
DeLong, 2003), wi h he de ia ion om he U.S. esul s
being explained by di e ences be ween he egula o y
egimes in Eu ope and he U.S. (Cybo-O one &
Mu gia, 2000). In es iga ing he d i e s o Eu opean
bank M&As mo e closely, Bei el e al. (2004) ind ha
geog aphical p oximi y is a key de e minan o success-
ul bank me ge s.
Resea ch on M&As, e en beyond he na ow scope o
bank me ge s, is s ill compa a i ely sca ce ou side o he
U.S. and Eu ope and ew s udies look a Asian econo-
mies. Howe e , hese coun ies con inuously gain in
impo ance o he global economy and po en ially o e
a ac i e in es men oppo uni ies, especially o i ms
and banks ope a ing in ma ke s ha ha e ewe g ow h
oppo uni ies. S ill, he M&A li e a u e ocusing on Asia
is limi ed and p edominan ly ocused on co po a e M&As
a he han speci ically on bank M&As. Examining a
la ge da ase o global M&As, Alexand idis e al. (2010)
ind ha Japanese i ms ea n posi i e and signi ican
M&A announcemen e u ns, while he announcemen
e u ns o o he Asian acqui e s lack signi icance bu a e
s ill posi i e. They con end ha one eason o hese
e u n pa e ns a e lowe le els o compe i ion in he
ma ke o co po a e con ol ou side o US, Canada, and
UK. Chuang (2017) epo s posi i e e u ns o acqui e s
in M&A ansac ions in he Asia-Paci ic egion, especially
o acqui e 's employing op- ie inancial ad iso s. Fo
Chinese domes ic M&As, Chi e al. (2011) as well as
Ahmed e al. (2023) epo posi i e acqui e M&A
announcemen e u ns, while Fa emi e al. (2017) docu-
men simila indings o Japan.
Focusing on bank me ge s in eme ging ma ke s mo e
b oadly, Kiymaz (2004) shows ha U.S. acqui e s engag-
ing in acquisi ions in La in Ame ica expe ience posi i e
sha eholde weal h e ec s, which can be pa ially
explained by mac oeconomic a iables, such as he eco-
nomic de elopmen s a us o he a ge coun y and he
le el o go e nmen e iciency. Godda d e al. (2012), in
con as , documen less posi i e alua ion e ec s o
me ge s among La in Ame ican banks wi h, he acqui -
ing ins i u ions ob aining a bes s a is ically weakly sig-
ni ican e u ns. The e ec s o bank M&As in Asia a e
likewise no well documen ed. Kiymaz (2004) documen s
o a subsample o U.S. acqui ing banks ha hey ea n
insigni ican e u ns in Asia. In a simila ein, Godda d
e al. (2012) epo non-signi ican e u ns o Asian
banks ha acqui e a ge s in o he eme ging
Asian economies.
Based on ecen e idence om co po a e M&As
ha acqui e s ea n posi i e e u ns upon M&A
announcemen s (e.g., Alexand idis e al., 2017;
Tunyi, 2021), he indings o co po a eM&AsinAsia
(e.g., Alexand idis e al., 2010; Chuang, 2017), he ea -
lie indings on bank me ge s in Asia (Godda d
e al., 2012;Kiymaz,2004), and he e idence om he
U.S. and Eu ope ha geog aphically ocusing me ge s
end o lead o be e esul s o he acqui ing banks'
sha eholde s han c oss-bo de me ge s (e.g., Bei el
e al., 2004;Co ne e al.,2006;DeLong,2001), we p e-
dic ha Asian domes ic acqui e s will achie e posi i e
s ock e u ns. A he same ime, we expec ha
acqui e s engaging in c oss-bo de ansac ions achie e
nega i e e u ns, as hei choice o a ge migh be lim-
i ed (e.g., due o es ic ions on o eign bank owne -
ship) o expansion in o a di e en egula o y and
cul u al en i onmen may be pe cei ed as iskie . Ta -
ge s, on he o he hand, a e likely o achie e la ge posi-
i e e u ns, ega dless o he o igin o he acqui e . We
he e o e hypo hesize:
KOLARIC ET AL.2217
H1a. Domes ic bank M&As in Asia esul in
posi i e e u ns o acqui e s, while c oss-
bo de acquisi ions a e associa ed wi h nega-
i e acqui e e u ns.
H1b. Bank me ge s in Asia lead o signi i-
can , posi i e e u ns o a ge banks, ega d-
less whe he i is a domes ic o c oss-bo de
ansac ion.
2.2 |M&As and ma ke powe
M&As can al e he compe i i e landscape o an en i e
indus y and will he e o e likely a ec he i als o
me ging i ms, oo. Any examina ion o he e ec
o M&As on an indus y's consolida ion p ocess should
consequen ly include an analysis o i al e ec s o M&A
announcemen s (Be ge e al., 1999). The main conce n
ela ing o inc eased consolida ion h ough M&As cen e
on ma ke concen a ion and he po en ial inc ease in
ma ke powe o he indus y's emaining i ms. This
inc ease in ma ke powe o he emaining i ms may
lead o subsequen an icompe i i e beha iou by hese
i ms, po en ially o he de imen o consume s.
These conce ns a e cap u ed by he Ma ke Powe
Hypo hesis. Pa icula ly in he banking indus y, he pos-
sibili y o such beha iou leads o ex ensi e sc u iny o
me ge s by an i us au ho i ies.
Mul iple s udies examine he e ec s o M&As on i al
companies' sha e p ices o d aw conclusions abou in es-
o s' pe cep ion o consolida ion ac i i y
(e.g., Eckbo, 1983,1985; Hanki e al., 2011; Ma aigne
e al., 2021; Song & Walking, 2000; S illman, 1983).
Eckbo (1983) and S illman (1983) speci ically es
whe he inc eases in ma ke powe a e po en ially a alid
conce n. They a gue ha ho izon al me ge s should no
only lead o posi i e weal h e ec s o acqui e s, bu also
o hei i als, as all companies wi hin a gi en indus y
should p o i om an inc ease in he indus y's concen-
a ion le el. While hey ind e idence o posi i e weal h
e ec s o i als, hey s ill a gue ha hese weal h e ec s
a e no he main d i e o M&As. None heless, ecen
e idence om he U.S. shows ha me ge s in indus ies
wi h high concen a ion a ios a e mo e p o i able, while
ope a ional e iciency does no inc ease (G ullon
e al., 2019). Mo eo e , Fa hollahi e al. (2022) documen
ha me ge s in concen a ed indus ies wi h high p od-
uc simila i y lead o mo e posi i e weal h e ec s o
acqui e s and hei i als. This sugges s ha ma ke
powe conside a ions a e likely a d i ing o ce
behind M&As.
The i al e ec s o bank me ge s and acquisi ions
ecei ed limi ed a en ion so a . Hanki e al. (2011)
examine he in a-con inen al i al e ec s o U.S. and
Eu opean bank me ge s. They ind ha , among he
in es iga ed hypo heses, ma ke powe conside a ions
a e likely o be he main conside a ion when ma ke pa -
icipan s alue bank me ge s. In pa icula , e u n pa -
e ns whe e acqui e s, a ge s, and hei espec i e i als
bene i , a e signi ican ly ela ed o in a-indus y
me ge s, inc easing ma ke concen a ion, and la ge ela-
i e a ge size. In he con ex o bank akeo e s in Asia,
ma ke powe conside a ions a e also likely o be a domi-
nan ac o , as local go e nmen s opened hei banking
sec o s and simul aneously encou aged u he consolida-
ion among domes ic ins i u ions ollowing he 1997
Asian Financial C isis. In his scena io o inc easing con-
solida ion, no only Asian domes ic acqui e s bu also
hei i als s and o gain. The e o e, wi h espec o i al
s ock ma ke e u ns we hypo hesize
i
:
H2. Ri als o Asian domes ic acqui ing banks
ea n signi ican posi i e e u ns su ounding
M&A announcemen s.
In case ma ke powe conside a ions should indeed
play a p ominen ole, hen no only he sha e p ice o
he acqui e s' i als should inc ease, bu also hose o he
a ge i als. Howe e , when i comes o he a ge i als'
M&A announcemen e ec s, he pic u e is mo e nuanced
wi h he mos equen ly in es iga ed assump ion ela -
ing o he Acquisi ion P obabili y Hypo hesis. I s unda-
men al idea is ha a ge i als will ea n posi i e e u ns
a ound he akeo e announcemen o a compe i o ,
based on an inc eased p obabili y o becoming a a ge in
a u u e ansac ion (Song & Walking, 2000). Bo h Song
and Walking (2000) and Akhigbe and Madu a (1999) ind
e idence in suppo o he Acquisi ion P obabili y Hypo h-
esis in hei espec i e c oss-indus y s udies. Mo eo e ,
Akhigbe and Ma in (2000) documen ha he e u n pa -
e ns p edic ed by he Acquisi ion P obabili y Hypo hesis
a e pa icula ly p onounced o a ge i als o c oss-
bo de M&As. Fo eign en y in o a ma ke may inc ease
compe i ion, bu he posi i e signal ha o eign akeo e s
send o capi al ma ke s wi h ega d o g ow h oppo uni-
ies and a ou able asse alua ions appea o o se hese
conce ns. Ye , he exis ence o ma ke powe conside -
a ions may also play a ole when i comes o he s ock
e u ns o a ge i als, which means ha he Ma ke
Powe Hypo hesis canno be comple ely uled ou , oo.
This lea es us wi h some ambigui y ega ding he possi-
ble channel o a ge i al e u ns. We he e o e di e en-
ia e be ween he o igin o he acqui ing bank and
2218 KOLARIC ET AL.
dis inguish be ween a ge i als o domes ic and c oss-
bo de ansac ions.
In he con ex o he p esen s udy, he Acquisi-
ion P obabili y Hypo hesis is likely o be ele an o
c oss-bo de deals. The acquisi ions o a i m by o -
eign inancial ins i u ions may indica e a ou able
indus y condi ions and g ow h oppo uni ies while
simul aneously aising he p obabili y o he emain-
ing i ms o becoming u u e akeo e a ge s. The
in e p e a ion o he s ock e u ns o a ge i als o
domes ic acquisi ions is less ob ious. In p inciple,
hey s and o gain based on he same a ionale as
he i als o a ge s in c oss-bo de ansac ions. A
hesame ime, hese i mswouldalsogain om u -
he consolida ion and less compe i ion. Highe le els
o ma ke concen a ion may, howe e , also imply
less oom o addi ional consolida ion, which may
mode a e e u ns since being he a ge o a u u e
acquisi ion is hen less likely. This leads us o an ici-
pa e ha he i als o c oss-bo de acquisi ion a ge s
s and o achie e highe e u ns han hose o domes-
ic ansac ions. These conside a ions a e summa ized
in he ollowing hypo hesis:
H3. Ri als o a ge banks achie e signi ican
posi i e e u ns whe eby i als o a ge s ha
a e acqui ed in a c oss-bo de ansac ion
gain highe e u ns han a ge i als o
domes ic deals.
Besides using he s ock e u n pa e ns o
acqui e s, a ge s, and hei espec i e i als o de i e
whe he ma ke powe conside a ions a e a d i ing
o cebehindbankM&AsinAsia,amo edi ec
app oach is o examine ma ke concen a ion a ios,
o mo e speci ically hei changes. Focusing on
changes in concen a ion a ios is mo i a ed by
Nocke and Whins on (2022), who highligh ha
changes in concen a ion le els a e mo e impo an
in de e mining he impac o me ge s on compe i ion
han he concen a ion le els by hemsel es. We
an icipa e a signi ican inc ease in concen a ion
a ios ollowing domes ic me ge s, while we expec
no such e ec ollowing c oss-bo de acquisi ions. In
he la e case, ma ke concen a ion should emain
he same, as he ma ke sha e is simply ans e ed
o a o eign bank, which should ha e no impac on
domes ic concen a ion a ios. We he e o e
hypo hesize:
H4. Asian domes ic bank M&As lead o
inc eases in ma ke concen a ion a ios
ollowing ansac ions, while concen a ion
a ios a e una ec ed by c oss-bo de deals.
3|DATA AND METHODOLOGY
3.1 |Acqui e and a ge bank da a
selec ion and sample desc ip ion
Ou p ima y sou ce o M&As among inancial ins i-
u ions is he Thomson Financial Secu i ies Da a
Company Me ge s and Acquisi ion da abase (SDC).
We only conside e en s whe e he a ge is loca ed
in Asia,
ii
whe eas no es ic ions a e placed on he
na ionali y o he acqui ing ins i u ion. We selec all
comple ed M&A deals announced be ween Janua y
1995 and Decembe 2021. Addi ionally, we equi e
ha a ansac ion alue is eco ded and ha bo h a -
ge and acqui e a e inancial ins i u ions.
iii
Fu he -
mo e, we only conside majo i y acquisi ions and
equi e ha a leas he acqui ing bank is lis ed on a
s ock exchange wi h s ock p ice da a being a ailable
in su icien quali y. In a nex s ep, we e i y ha he
o icial announcemen day in SDC is co ec by check-
ing i wi h o icial company announcemen s and he
Nexis da abase. Any disc epancies a e esol ed by
using he i s announcemen da e we iden i ied. Fu -
he mo e, we ensu e ha no majo con ounding
e en s occu du ing he [5;+5] e en window.
Applying hese c i e ia, we iden i y a o al o
486 e en s o acqui ing banks om 30 di e en
na ions wi h a o al deal alue in excess o 382 billion
U.S. dolla s. The majo i y o a ge s a e p i a e and
he da a quali y o he publicly lis ed ones is o en
compa a i ely poo , lea ing us wi h a a ge sample o
107 obse a ions. The mos equen acqui ing na ion
is Japan wi h a o al o 164 ansac ions ollowed
by 50 M&As by Sou h Ko ean banks, and 49 ansac-
ions by Indian inancial ins i u ions (see Table OA-1
in he Online Appendix o he coun y dis ibu ion
ma ix).
Table 1shows he dis ibu ion o deals o he acqui e
and a ge sample by geog aphic ocus o he ansac ion
and by yea . Table 1Panel A shows ha 71.4% o ansac-
ions a e by domes ic Asian acqui e s, while 28.6% a e
c oss-bo de deals. The alue o acquisi ions by Asian
domes ic acqui e s a exceeds hose o c oss-bo de
acqui e s wi h mo e han 318 billion U.S. dolla s e sus
64 billion U.S. dolla s, indica ing ha c oss-bo de ans-
ac ions a e, on a e age, smalle (USD 460 million e sus
USD 918 million). Looking a he dis ibu ion o deals
ac oss ime, we ind ha he numbe o M&A deals is
KOLARIC ET AL.2219
oughly e enly dis ibu ed be ween he i s hal o he
in es iga ion pe iod (1995–2008) and he second hal
(2009–2021), albei wi h a sligh endency owa ds mo e
ansac ion du ing he la e pe iod.
The sample o exchange-lis ed a ge s is mainly om
Japan (45), ollowed by India and Taiwan (bo h 15), and
Sou h Ko ea (10) (see also Table OA-1 in he Online
Appendix). Ne e heless, e en hough he a ge sample
TABLE 1 Acqui ing and a ge bank sample desc ip ion.
Acqui e sample Ta ge sample
Numbe
o deals
Pe cen age
o deals
Deal alue
(million
U.S.$)
Pe cen age o
o al deal
alue
Numbe
o deals
Pe cen age
o deals
Deal alue
(million
U.S.$)
Pe cen age o
o al deal
alue
Panel A: Geog aphic ocus
Domes ic 347 71.40 318,581.77 83.27 88 82.24 260,155.83 90.78
C oss-
bo de
139 28.60 64,024.68 16.73 19 17.76 26,423.77 9.22
To al 486 100.00 382,606.45 100.00 107 100.00 286,579.60 100.00
Panel B: F equency by yea s
1995 3 0.62 34,056.06 8.90 1 0.93 33,787.73 11.79
1996 4 0.82 368.41 0.10
1997 2 0.41 93.78 0.02
1998 8 1.65 2238.88 0.59 2 1.87 244.39 0.09
1999 14 2.88 73,963.64 19.33 4 3.74 71,633.04 25.00
2000 27 5.56 38,534.23 10.07 4 3.74 30,415.01 10.61
2001 20 4.12 18,289.25 4.78 11 10.28 12,092.53 4.22
2002 16 3.29 11,422.36 2.99 6 5.61 8984.30 3.14
2003 14 2.88 6189.48 1.62 3 2.80 5168.90 1.80
2004 23 4.73 8009.03 2.09 4 3.74 2467.47 0.86
2005 27 5.56 53,110.50 13.88 6 5.61 45,805.50 15.98
2006 15 3.09 11,986.32 3.13 4 3.74 3537.35 1.23
2007 24 4.94 12,231.40 3.20 4 3.74 8209.05 2.86
2008 27 5.56 9179.71 2.40 4 3.74 7215.03 2.52
2009 42 8.64 23,237.69 6.07 6 5.61 10,752.50 3.75
2010 27 5.56 7605.18 1.99 9 8.41 5218.19 1.82
2011 21 4.32 4464.15 1.17 2 1.87 2205.71 0.77
2012 25 5.14 5807.94 1.52 1 0.93 1437.48 0.50
2013 16 3.29 6915.78 1.81 1 0.93 394.24 0.14
2014 29 5.97 16,618.80 4.34 5 4.67 9770.81 3.41
2015 14 2.88 5804.11 1.52 2 1.87 3837.98 1.34
2016 15 3.09 4320.24 1.13 5 4.67 1713.72 0.60
2017 20 4.12 14,194.69 3.71 9 8.41 13,416.89 4.68
2018 16 3.29 6131.81 1.60 4 3.74 4753.48 1.66
2019 24 4.94 4067.93 1.06 7 6.54 2695.66 0.94
2020 4 0.82 527.45 0.14 1 0.93 507.39 0.18
2021 9 1.85 3237.67 0.85 2 1.87 315.26 0.11
To al 486 100.00 382,606.45 100.00 107 100 286,579.60 100
No e: This able shows he geog aphic ocus o he acquisi ions and he dis ibu ion o e en s h ough ime o he acqui e and a ge bank sample. The deal
alue is gi en in U.S. dolla s as o he ime he deal was announced.
2220 KOLARIC ET AL.
consis s o only 107 ansac ions, he o e all deal alue is
mo e han 286 billion U.S. dolla s, o app oxima ely 75%
o he sample's o al deal olume. This is no su p ising,
as he la ges deals usually ha e a ge s ha a e lis ed on
a s ock exchange.
3.2 |Ri al bank da a selec ion and
sample desc ip ion
The acqui e and a ge i al sample selec ion p ocedu e
ollows a modi ied app oach o Hanki e al. (2011) wi h
he equi emen o ob ain a leas h ee i al i ms o an
e en o a oid o e - o unde weigh ing speci ic e en s
(see Appendix B o a de ailed desc ip ion o he i al
selec ion p ocedu e). We de e mine h ee sui able i als
o 466 acqui e s ou o ou sample o 486 acqui ing
banks, gi ing us a o al o 1398 i al obse a ions. Fo
ou sample o 107 exchange-lis ed a ge s, we iden i y
h ee i als o 94 ins i u ions, gi ing us a o al o
282 obse a ions. Acqui ing and a ge bank i als a e
ai ly close in e ms o a e age ma ke capi aliza ion,
wi h he acqui ing bank's i al being wi hin app oxi-
ma ely 32% o he acqui ing bank, while o a ge s i is
sligh ly lowe a abou 29%.
i
Gene ally, i als o domes-
ic acqui e s o a ge s a e close o he espec i e
acqui e o a ge in e ms o ma ke capi aliza ion han
hei pee s in c oss-bo de ansac ions.
3.3 |Empi ical analyses
The s ock e u ns a e calcula ed using a ma ke model
e en s udy. The model is es ima ed using a 252- ading
day pe iod (one ading yea ) om 272 o 21 days p io o
he o icial me ge announcemen wi h:
Ri ¼b
αiþb
βiRm þεi ,ð1Þ
whe e R
i
is de ined as he e u n o s ock ion day
du ing he es ima ion pe iod, R
m
is de ined as he
e u n o he espec i e alue-weigh ed Da as eam coun-
y index on day , and b
αiand b
βia e he eg ession coe i-
cien s o s ock i. The cumula i e abno mal e u ns
(CARs) o s ock ia e calcula ed du ing he e en win-
dow [τ
1
;τ
2
] wi h τ
1
,τ
2
ϵ[5,…,+5] s a ing 5 days p io o
and ending 5 days a e he announcemen day =0.
A e age CARs (ACARs) a e calcula ed as he sum o all
CARs o e a pa icula e en window di ided by he
numbe o obse a ions.
Two signi icance es s a e used o de e mine whe he
he obse ed ACARs a e s a is ically di e en om ze o.
We employ he a iance-change co ec ed s anda dized
c oss-sec ion es de eloped by Boehme e al. (1991), he
BMP- es , inco po a ing he co ec ion o se ial depen-
dence ha can occu when summing up successi e
abno mal e u ns ha a e es ima ed using he same
pa ame e s acco ding o Cowan (1993). Fu he mo e, we
es o signi icance using he nonpa ame ic ank es
i s in oduced by Co ado (1989) and la e e ined by
Co ado and Zi ney (1992), he CZ- es .
To iden i y he main de e minan s o he acqui ing
banks' sho - e m abno mal e u ns o he M&A
announcemen s, we conduc se e al c oss-sec ional
eg ession analyses. In i s ull speci ica ion, he o dina y
leas squa es (OLS) eg ession akes he o m:
CARi,1;þ1½
¼αþβ1DOMESTICiþXjγjYi,jþXkδkZi,kþεi,
ð2Þ
whe e he dependen a iable CARi,1;þ1½
is he cumula-
i e abno mal e u n o i m idu ing he [1;+1] e en
window. To es whe he Asian domes ic acqui e s
achie e signi ican ly highe CARs han acqui e s in
c oss-bo de ansac ions, we use he bina y a iable
DOMESTIC, which is equal o one in case acqui e and
a ge a e headqua e ed in he same coun y, and ze o
o he wise. Yi,jand Zi,ka e ec o s o deal and acqui e
con ol a iables, espec i ely. The deal con ol a iables
include, among o he s, a iables ela ing o he alue o
he ansac ion, whe he he ansac ion was ocusing o
he bank's ac i i ies, he s ake acqui ed, and whe he he
acqui e was p e iously in es ed in he a ge . We also
con ol whe he he a ge was p i a e a he ime o he
acquisi ion announcemen , as p io esea ch shows ha
acqui e s o p i a e i ms can achie e highe e u ns as
hey pay lowe p emiums due o an illiquidi y discoun
o p i a e i ms (Fulle e al., 2002; Ma e al., 2019;
O ice , 2007). The ec o o acqui e con ol a iables
con ains a iables ela ing o he size o he acqui e , i s
le e age, and p o i abili y. Finally, ε
i
is he e o e m. A
de ailed desc ip ion o all a iables is p o ided in
Appendix A, while Table OA-2 S2 in he Online Appen-
dix epo s he summa y s a is ics o he a iables.
4|EMPIRICAL RESULTS
4.1 |Acqui e and a ge M&A
announcemen e ec s
The e en s udy esul s o he acqui ing banks su ound-
ing M&A announcemen s a e p esen ed on he le o
Table 2. O e all, we obse e signi ican posi i e
KOLARIC ET AL.2221
announcemen e u ns, wi h an ACAR o 0.97% du ing
he [1;+1] e en window, culmina ing in an ACAR o
1.49% du ing he [5;+5] e en window. This esul
s ands in s a k con as o ea lie s udies on he inancial
sec o consolida ion in he U.S. (e.g., Beche , 2000),
whe e gene ally signi ican nega i e e u ns a e docu-
men ed. The esul also di e s om p io s udies on
Eu opean bank M&As (e.g., Bei el e al., 2004) and
M&As in eme ging economies (e.g., Godda d e al., 2012;
Kiymaz, 2004), whe e in bo h cases insigni ican e u ns
a e obse ed. Fo example, Bei el e al. (2004) epo
insigni ican nega i e ACARs close o ze o du ing he
[1;+1] e en window o bidde s in Eu opean bank
M&As and Godda d e al. (2012) documen insigni ican
ACARs o 0.017% o Asian bidde s. Howe e , ou esul s
mi o mo e ecen empi ical e idence o M&As ou side
he banking sec o (e.g., Ad a e al., 2020; Alexand idis
e al., 2017; Tunyi, 2021).
To es hypo hesis H1a, we di ide ou sample in o
Asian domes ic acqui e s and c oss-bo de acqui e s. We
ind ha Asian domes ic acqui e s a e he d i ing o ce
behind he o e all posi i e e u ns as hey achie e a
highly signi ican and posi i e ACAR o 1.31% du ing he
[1;+1] e en window, and up o 1.86% du ing he [5;
+5] e en window. The esul s o c oss-bo de acqui e s,
in con as , gene ally lack signi icance and a e much
smalle in magni ude, albei la gely posi i e. I he e o e
appea s as i Asian domes ic acquisi ions a e indeed
iewed a mo e posi i ely by in es o s han c oss-bo de
acquisi ions in o Asia, suppo ing hypo hesis H1a.
The esul s o he sample o exchange-lis ed a ge
banks a e p esen ed on he igh o Table 2and a e in
line wi h p io esea ch on bank M&As in U.S. and
Eu ope (e.g., Beche , 2000; Bei el e al., 2004; Hanki
e al., 2011) as a ge banks ea n la ge, posi i e, and
highly signi ican abno mal e u ns du ing he days su -
ounding M&A announcemen s. Du ing he en i e [5;
+5] e en window, he ACAR eaches 5.42%. To es
hypo hesis H1b, we di ide he a ge sample in o i ms
pu chased by Asian domes ic acqui e s and hose ha
a e a ge s o c oss-bo de acquisi ions. Ta ge s o Asian
domes ic acqui e s ob ain highly signi ican posi i e
e u ns o up o 5.69% du ing he [5;+5] e en window.
The a ge s o c oss-bo de acquisi ion likewise ea n
TABLE 2 E en s udy esul s o acqui ing and a ge banks.
E en
window
ACAR
(%)
Median
CAR (%)
BMP- es (Z-
sco e)
Co ado- es
(Z-sco e)
ACAR
(%)
Median
CAR (%)
BMP- es (Z-
sco e)
CZ- es (Z-
sco e)
All acqui e s (n=486) All exchange-lis ed a ge banks (n=107)
[5;+5] 1.49 0.33 3.507*** 2.379** 5.42 3.72 3.979*** 2.962***
[1;+1] 0.97 0.42 2.990*** 2.503** 4.13 1.33 4.666*** 4.313***
[0;0] 0.52 0.01 3.054*** 2.285** 2.03 0.68 3.976*** 3.911***
[1;0] 0.72 0.18 3.231*** 2.387** 2.59 0.48 3.911*** 3.652***
[0;+1] 0.78 0.25 2.530** 2.293** 3.56 1.90 4.433*** 4.395***
Asian domes ic acqui e s (n=347) Ta ge s o Asian domes ic acqui e s (n=88)
[5;+5] 1.86 0.61 3.773*** 2.345** 5.69 3.64 3.927*** 2.443**
[1;+1] 1.31 0.46 3.649*** 3.115*** 4.07 2.03 4.424*** 4.057***
[0;0] 0.73 0.14 3.860*** 3.138*** 2.06 0.82 3.802*** 4.299***
[1;0] 0.93 0.32 3.653*** 2.757*** 2.51 0.42 3.523*** 3.425***
[0;+1] 1.11 0.51 3.383*** 3.276*** 3.62 2.36 4.273*** 4.584***
C oss-bo de acqui e s (n=139) Ta ge s o c oss-bo de acqui e s (n=19)
[5;+5] 0.57 0.04 0.507 0.752 4.16 5.21 1.438 1.980**
[1;+1] 0.15 0.23 0.273 0.277 4.37 0.67 1.574 1.705*
[0;0] 0.00 0.24 0.612 0.738 1.86 0.10 1.212 0.083
[1;0] 0.18 0.09 0.251 0.088 2.95 0.60 1.667* 1.468
[0;+1] 0.04 0.18 0.961 0.949 3.28 0.12 1.341 0.679
No e: This able epo s he s ock ma ke eac ion o acqui ing and a ge banks o M&A announcemen s in Asia be ween 1995 and 2021. The cumula i e
abno mal e u ns (CARs) a e es ima ed o acqui ing and a ge banks o e mul iple e en windows. Daily abno mal e u ns a e ob ained using he ma ke
model wi h a 252- ading day es ima ion pe iod. A e age CARs (ACARs) a e es ed o s a is ical signi icance using he pa ame ic es by Boehme e al.
(1991), he BMP- es , and he nonpa ame ic ank es by Co ado (1989) and Co ado and Zi ney (1992), he CZ- es . The esul s o Asian domes ic and c oss-
bo de acqui e s and a ge s o Asian domes ic and c oss-bo de acqui e s a e p esen ed sepa a ely. *, **, and *** deno e s a is ical signi icance a he 10%, 5%,
and 1% le el, espec i ely.
2222 KOLARIC ET AL.
CARi,1;þ1½
¼αþβ1ΔIDViþβ2ΔMASiþβ3ΔUAIi
þβ4ΔPDIiþXjγjYi,jþXkδkZi,k
þεi,
ð3Þ
whe e ΔIDV and ΔMAS a e he di e ences be ween he
acqui ing and a ge bank na ion in Ho s ede's indi idu-
alism e sus collec i ism and masculini y e sus eminin-
i y dimensions and ΔUAI and ΔPDI a e he di e ence in
Ho s ede's unce ain y a oidance and powe dis ance
index be ween he acqui ing and a ge bank na ion. Yi,j
and Zi,ka e again he ec o s o deal and acqui e con ol
a iables and ε
i
is he e o e m (see also Appendix A o
de ailed a iable de ini ions).
The esul s o his analysis a e p esen ed in Table 7.
We ind ha none o he a iables measu ing cul u al di -
e ence a e signi ican apa om some weak e idence
ha posi i e di e en ials in he unce ain y a oidance
index (i.e., he acqui e 's coun y has a highe unce -
ain y a oidance index han he a ge 's coun y) may
lead o highe acqui e CARs. Howe e , his esul is only
weakly signi ican and e en loses signi icance in conjunc-
ion wi h he o he a iables measu ing cul u al di e en-
ce.
xiii
We, he e o e conclude ha cul u al di e ences do
no ha e an in luence acqui ing banks' sho - e m
e u ns su ounding he M&A announcemen .
5.2.2 | Regula o y a bi age conside a ions
Regula o y a bi age conside a ions may also play a
p ominen ole o banks, wi h M&As being one way
h ough which acqui ing banks ob ain asse s in ju isdic-
ion wi h lowe le els o egula ion and supe ision han
hei own. Hous on e al. (2012) ind ha banks indeed
seem o mo e capi al in o less egula ed ma ke s. In con-
as , Buch and DeLong (2004) show ha banks in ju is-
dic ions wi h highe le els o supe iso y powe a e
ac ually mo e a ac i e a ge s o in e na ional M&A
ansac ions, while Ka olyi and Taboada (2015) docu-
men ha acqui ing banks a e usually loca ed in coun-
ies wi h s onge egula o y egimes han hei a ge .
Mo eo e , hey ind ha e u ns o a ge s a e highe in
cases whe e he acqui e 's coun y egula o y amewo k
is o highe quali y han ha o he a ge na ion. F ame
e al. (2020) likewise ind ha in e na ional subsidia ies
o U.S. bank holding companies a e likely o be loca ed
in ju isdic ion wi h lowe egula ion le els han in he
U.S.
xi
TABLE 7 Impac o cul u al
di e ences on c oss-bo de acqui e
M&A announcemen e u ns.
Model 1 Model 2 Model 3 Model 4 Model 5
ΔIDV 0.013 0.006
(0.025) (0.029)
ΔMAS 0.039 0.029
(0.025) (0.024)
ΔUAI 0.035* 0.030
(0.019) (0.018)
ΔPDI 0.017 0.001
(0.028) (0.032)
Deal con ols YES YES YES YES YES
Acqui e con ols YES YES YES YES YES
Cons an YES YES YES YES YES
Ta ge coun y FE YES YES YES YES YES
Yea FE YES YES YES YES YES
Obse a ions 139 139 139 139 139
R
2
0.330 0.351 0.356 0.330 0.370
No e: This able epo s he c oss-sec ional eg ession coe icien s using c oss-bo de acqui ing bank i's [1;
+1] e en window cumula i e abno mal e u n (CAR) as he dependen a iable. The a iables o in e es
a e ΔIDV and ΔMAS, which measu e he di e ence in Ho s ede's indi idualism e sus collec i ism and
masculini y e sus eminini y dimension (Ho s ede, 2001; Ho s ede e al., 2010) be ween he acqui ing and
a ge bank na ion, espec i ely, and ΔUAI and ΔPDI, which measu e he di e ence in Ho s ede's
unce ain y a oidance and powe dis ance index (Ho s ede, 2001; Ho s ede e al., 2010) be ween he
acqui ing and a ge bank na ion, espec i ely (see Appendix A o mo e de ails on he a iables). The
s anda d e o s a e co ec ed o he e oskedas ici y and clus e ed a he acqui ing bank le el and gi en in
pa en heses. *, **, and *** deno e s a is ical signi icance a he 10%, 5%, and 1% le el, espec i ely.
KOLARIC ET AL.2229
To analyse whe he di e ences in egula o y egimes
play a ole in M&A ansac ions in Asia, we ob ain p ox-
ies o egula o y and supe iso y powe in di e en
coun ies and h ough ime om he Bank Regula ion
and Supe ision Su ey o he Wo ld Bank. The da abase
is c ea ed om mul iple su eys and is compiled by Ba h
e al. (2004,2005,2008,2012) and Angine e al. (2019).
x
We use h ee speci ic indices o ou analyses: he
Res ic ion on Banking Ac i i y Index, he O icial Supe -
iso y Powe Index, and he Financial S a emen T ans-
pa ency Index. As we a e only in e es ed in he
di e ences in he egula o y and supe iso y egimes
be ween he acqui ing and a ge coun y, we again limi
ou sample o c oss-bo de acquisi ions. We calcula e he
di e ence in hese indices be ween he acqui e and a -
ge coun y, cap u ed by he ollowing h ee a iables:
ΔTRANSPARENCY,ΔSUPERVISORY, and
ΔRESTRICTION (see Appendix A o de ailed a iable
de ini ions). We hen use a c oss-sec ional eg ession
wi h acqui ing bank i's [1;+1] e en window CAR as
he dependen a iable o he o m:
CARi,1;þ1½
¼αþβ1ΔTRANSPARENCYi
þβ2ΔSUPERVISORYi
þβ3ΔRESTRICTIONiþXjγjYi,j
þXkδkZi,kþεi,
ð4Þ
whe e Yi,jand Zi,ka e again he ec o s o deal and
acqui e con ol a iables and ε
i
is he e o e m.
The eg ession esul s epo ed in Table 8indi-
ca e ha egula o y a bi age conside a ion appea
o play a mos a subo dina ed ole o c oss-bo de
bank M&As in Asia. The only a iable ha is sig-
ni ican , a leas on a s andalone basis, is
ΔRESTRICTION, which has a nega i e and signi i-
can coe icien . This indica es ha acqui ing banks
ha pu chase a ge s in ju isdic ions wi h lowe
le els o es ic ions on banking ac i i ies han in
hei home coun y ob ain lowe e u ns, sugges ing
ha in es o s may be conce ned abou he bank
po en ially aking on isky ac i i ies ha i may no
be able o pu sue a home. Howe e , once he a i-
able is analysed in conjunc ion wi h he o he a i-
ables ela ing o egula o y di e ences be ween he
acqui ing and a ge coun y, i loses i s signi i-
cance. We he e o e conclude ha egula o y a bi-
age conside a ions, like cul u al di e ences, do no
signi ican ly impac he sho - e m M&A announce-
men e u ns o c oss-bo de acqui e s in Asia.
O e all, he s ock e u n pa e ns su ounding bank
M&As in Asia can be p edominan ly explained by
domes ic me ge s, whe e ma ke powe conside -
a ions appea o be he p ima y channel h ough
which acqui e s achie e posi i e sha eholde weal h
e ec s.
TABLE 8 Impac o egula o y di e ences on c oss-bo de acqui e M&A announcemen e u ns.
Model 1 Model 2 Model 3 Model 4
ΔTRANSPARENCY 0.724 0.195
(0.909) (2.748)
ΔSUPERVISORY 0.475 0.378
(0.332) (0.419)
ΔRESTRICTION 0.467** 0.153
(0.222) (0.552)
Deal con ols YES YES YES YES
Acqui e con ols YES YES YES YES
Ta ge coun y FE YES YES YES YES
Cons an YES YES YES YES
Yea FE YES YES YES YES
Obse a ions 105 71 105 69
R
2
0.385 0.565 0.414 0.574
No e: This able epo s he c oss-sec ional eg ession coe icien s using acqui ing bank i's [1;+1] e en window cumula i e abno mal e u n (CAR) as he
dependen a iable. The a iables o in e es a e ΔTRANSPARENCY,ΔSUPERVISORY, and ΔRESTRICTION, de ined as he di e ence in he Financial
S a emen T anspa ency Index, O icial Supe iso y Powe Index, and he Res ic ion on Banking Ac i i y Index, espec i ely be ween he acqui ing and a ge
bank na ion. The a iables a e based on he Bank Regula ion and Supe ision Su ey o he Wo ld Bank (see Appendix A o mo e de ails on he a iables).
The s anda d e o s a e co ec ed o he e oscedas ici y and clus e ed a he acqui ing bank le el and gi en in pa en heses. *, **, and *** deno e s a is ical
signi icance a he 10%, 5%, and 1% le el, espec i ely.
2230 KOLARIC ET AL.
6|FURTHER EMPIRICAL
ANALYSES
In his sec ion, we conduc wo addi ional es s. Fi s , we
ake a close look a ou a ge sample and es which a -
ge cha ac e is ics inc ease he likelihood o being
selec ed by Asian domes ic acqui e s e sus c oss-bo de
acqui e s. Second, we employ p opensi y sco e ma ching
(PSM) o con ol o po en ial di e ences in Asian domes-
ic and c oss-bo de acqui e s.
We use ou sample o 107 exchange-lis ed a ge
obse a ions and un a p obi eg ession whe e he
dependen a iable is de ined as one, i he a ge is
acqui ed by an Asian domes ic acqui e , and ze o o he -
wise. The independen a iables a e se o a iables
ela ed o size and p o i abili y di e ence as well as
selec ed a ge cha ac e is ics.
x i
The esul s o he p obi
eg ession consis en ly show ha Asian domes ic
acqui e s selec ela i ely la ge a ge s compa ed o hei
own size, while p o i abili y di e en ials play a subo di-
na ed ole (see Table S5 in he Online Appendix). While
we obse e a sligh endency ha c oss-bo de acqui e s
a e mo e likely o pu chase subsidia ies and ela i ely
la ge a ge s, as indica ed by he nega i e coe icien o
he espec i e a iables, o he a ge -speci ic a iables do
no appea o impac a ge selec ion. The e idence ha
Asian domes ic acqui e s seem o pu chase ela i ely
la ge a ge s compa ed o hei own size, while a he
same ime being less likely o buy subsidia ies, may be
in e p e ed as ma ke consolida ion mo i es being a p i-
ma y d i e o hei a ge selec ion. Tha he acquisi ion
o ela i ely la ge a ge s is bene icial o acqui e s is also
shown in Sec ion 4.3 and Table OA-3 in he Online
Appendix.
Nex , we use PSM o pai Asian domes ic acqui e s
( ea men g oup) wi h c oss-bo de acqui e s (con ol
g oup) o examine whe he ou esul s o di e en ial
weal h e ec s be ween Asian domes ic acqui e s and
c oss-bo de acqui ing banks a e d i en by di e ences in
he cha ac e is ics be ween he wo g oups. This is done
o alle ia e possible conce ns ega ding di e ences in
bank cha ac e is ics d i ing ou esul o posi i e Asian
domes ic acqui e announcemen e u ns. We allow o
each con ol obse a ion o be used mo e han once and
he co a ia es employed as ma ching c i e ia a e he deal
and acqui e con ols, as well as a ge coun y and yea
ixed e ec s. The a e age ea men e ec is posi i e wi h
1.231 and signi ican a he 5% le el. The e o e, Asian
domes ic acqui e s achie e, on a e age, signi ican ly
highe e u ns han banks ha engage in c oss-bo de
acquisi ions in Asia, e en a e con olling o
po en ial di e ences deal-speci ic and acqui e -speci ic
cha ac e is ics.
7|CONCLUSION
We in es iga e he indus y wide sha eholde weal h
e ec s o acqui e s, a ge s, and hei espec i e i als
su ounding bank M&A announcemen s in Asia
be ween 1995 and 2021. Ou esul s o 486 majo i y
acquisi ions show ha bo h acqui ing and a ge
banks enjoy posi i e s ock ma ke alua ion e ec s.
Howe e , when we di ide he sample in o Asian
domes ic and c oss-bo de acqui ing banks, we obse e
ha he posi i e o e all esul s o acqui e s a e
en i ely d i en by Asian domes ic deals. In con as ,
c oss-bo de acqui e s ealize non-signi ican e u ns.
By b oadening he scope o ou analysis and looking
a he e u ns o he acqui ing banks' i als, we ind
ha i als o Asian domes ic acqui e s ea n signi ican
posi i e e u ns, while he i als o c oss-bo de
acqui e s ea n sligh ly nega i e bu la gely insigni i-
can e u ns. The i als o he a ge banks also gain,
i espec i e o whe he i is a domes ic o c oss-bo de
ansac ion.
The esul s o he mul i a ia e eg essions p o ide
u he e idence ha Asian domes ic acqui e s' s ock
e u ns ou pe o m hose o c oss-bo de acqui e s. Addi-
ionally, a mo e de ailed analysis o he po en ial easons
o he posi i e e u ns o Asian acqui e s p o ides
s ong e idence ha ma ke powe conside a ions a e
likely o be he main d i e . We obse e a signi ican
inc ease in ma ke concen a ion a ios in he yea ol-
lowing he M&A ansac ion. A he same ime, Asian
domes ic acqui e s achie e highe e u ns, he highe
hei inc ease in ela i e ma ke sha e as he esul o he
ansac ion. Fo c oss-bo de acquisi ions, we es
whe he cul u al o egula o y a bi age conside a ions
d i e acqui ing banks' e u ns bu ind no e idence ha
his is he case. An analysis o a a ge 's likelihood o
being acqui ed by an Asian domes ic acqui e shows ha
domes ic acqui e s seek ou ela i ely la ge a ge s com-
pa ed o hei own size, u he co obo a ing ou esul s
ha domes ic acqui e s may speci ically seek o consoli-
da e he ma ke .
Ou indings a e in s a k con as o p io empi ical
esea ch ocusing on he banking ma ke s o he U.S. and
Eu ope (e.g. Beche , 2000; Bei el e al., 2004; Hanki
e al., 2011). In Asia, u he consolida ion among domes-
ic ins i u ions bene i s he acqui ing banks and hei
i als as in es o s appea o see conside able ad an ages
in hese me ge s. I seems ha in es o s pa icula ly
alue inc eases in he acqui ing bank's ma ke sha e.
This inc ease leads o a subsequen ise in banking ma -
ke concen a ion le els, which, in u n, mos likely leads
o an inc ease in ma ke powe o he emaining ins i u-
ions. This may ul ima ely aise egula o y conce ns in
KOLARIC ET AL.2231
case banks s a using hei inc eased ma ke powe o
he de imen o consume s.
ACKNOWLEDGEMENTS
We a e g a e ul o Kei h Pilbeam ( he edi o ) and wo
anonymous e e ees o hei aluable commen s and
sugges ions. We would also like o hank Jo Danbol ,
Leonidas Ba bopoulos, Milena Pe o a, Kwangwoo Pa k,
Jung Sun Yun, Robe Chi inko, Ning Gao, Kona i
Uchida, and he pa icipan s a he 2021 Vie nam Sympo-
sium in Banking and Finance, he 37 h In e na ional
Con e ence o he F ench Finance Associa ion, he
Sou he n Finance Associa ion 2017 Annual Mee ing,
he 2015 Financial Managemen Associa ion Annual
Mee ing, he 2015 In e na ional Con e ence on Asia-
Paci ic Financial Ma ke s, and he 2015 Midwes Finance
Associa ion Annual Mee ing o hei help ul commen s
and sugges ions on ea lie d agh s o his pape . This
esea ch did no ecei e any speci ic g an om unding
agencies in he public, comme cial o no - o -p o i sec-
o s. Open Access unding enabled and o ganized by P o-
jek DEAL.
DATA AVAILABILITY STATEMENT
Da a sha ing is no applicable o his a icle as da a om
comme cial da abases has been used ha a e subjec o
he da abase p o ide da a sha ing es ic ions.
ORCID
Sascha Kola ic h ps://o cid.o g/0000-0003-2656-9206
ENDNOTES
i
We do no an icipa e ha he i als o c oss-bo de acqui e s will
expe ience signi ican e u ns as he compe i i e si ua ion in he
espec i e domes ic banking ma ke is no meaning ully al e ed.
We he e o e o go a speci ic hypo hesis in ela ion o he i als o
c oss-bo de acqui e s.
ii
Asia is de ined along he adi ional geog aphic dema ca ion o
Asia and does no include coun ies in he Paci ic egion. The ol-
lowing coun ies in ou sample a e iden i ied as Asian: China,
Hong Kong, India, Indonesia, Japan, Kazakhs an, Malaysia,
Oman, Pakis an, Philippines, Saudi A abia, Singapo e,
Sou h Ko ea, S i Lanka, Taiwan, Thailand, Uni ed A ab Emi a es
and Vie nam.
iii
We use he p ima y S anda d Indus y Classi ica ion (SIC) codes
om 6000 o 6289 and SIC codes 6712 and 6733 o iden i y inan-
cial ins i u ions. We he eby explici ly exclude all insu ance ca -
ie s, eal es a e companies, non-bank holding companies and
miscellaneous in es men companies, such as oil oyal y ade s
and pa en owne s and lesso s.
i
Table B1 in Appendix Bp o ides a b ie o e iew o he ma ke
capi aliza ion o he i al sample in ela ion o he acqui ing and
a ge ins i u ions and he equency o obse a ions o hei
espec i e wo-digi SIC codes.
Fo Asian coun ies wi h mo e han i e c oss-bo de ansac ion,
we obse e ha Japanese, Sou h Ko ean, and Malaysian acqui e s
gene ally pe o m be e han Taiwanese o Singapo ean ones,
bu no o he dis inc pa e ns eme ge o coun ies wi h mo e
han i e obse a ions. Fo coun ies wi h ewe han i e c oss-
bo de acqui e s, he esul s a e mo e he e ogenous wi h no clea
pa e n eme ging. Howe e , wha can gene ally be obse ed is
ha c oss-bo de M&As by Asian banks esul in lowe acqui e
CARs han co esponding domes ic M&As.
i
As a obus ness exe cise, we also a y he leng h o he e en win-
dows o cap u e any signi ican p e-announcemen p ice changes.
To his end, we use he [63;+10], [42;+10], [20;+10] e en
window, in each case keeping a 252-day es ima ion window end-
ing 1 day p io o he i s day o he e en window. The longe
e en windows a e implemen ed o cap u e any po en ial long-
e m un-ups, pa icula ly o a ge s (Ea on e al., 2022). The
esul s show ha he e is almos no un-up obse able o c oss-
bo de acqui e s, bu a e y sligh one o Asian domes ic
acqui e s, which leads o he di e ence be ween Asian
domes ic and c oss-bo de acqui e s being e en mo e p o-
nounced (up o 2.86% o he [63;+10] e en window). Fo a -
ge s, ou main esul s a e likewise con i med as we obse e only
e y small un-ups p io o he M&A announcemen , wi h only
li le di e ence be ween a ge s o domes ic and c oss-bo de
acqui e s.
ii
To ensu e ha ou esul s a e no d i en by obse a ions om a
gi en a ge coun y/coun ies, we un se e al sensi i i y es s,
excluding ce ain a ge coun ies. Ou esul s o acqui e and
a ge announcemen CARs hold e en when d opping Japanese
a ge s ( he la ges numbe o a ge obse a ions), o Japanese,
Sou h Ko ean and Taiwanese a ge s. The le el o signi icance is
gene ally lowe , he mo e a ge coun ies a e d opped, bu he
o e all e u n pa e ns o acqui e s and a ge s s ill hold. Fo
acqui e i als, he o e all e u n pa e ns also s ill hold, bu he
indi idual ACARs lose signi icance when emo ing hese coun-
ies. The di e ence be ween ACARs o i als o Asian domes ic
and c oss-bo de acqui e s emains signi ican , albei only o
ce ain e en windows. The e o e, ou esul s appea o be some-
wha sensi i e o inclusion o he mos p ominen a ge coun-
ies, bu as he o e all e u n pa e ns emain, his does no
in alida e ou esul s o acqui e i als. The esul s o a ge
i als likewise s ill hold, albei a sligh ly educed le els o signi -
icance. The esul s a e no epo ed o easons o b e i y bu
a ailable upon eques . No e ha we consequen ly con ol o
coun y ixed e ec s in ou mul i a ia e eg essions, which
should cap u e po en ial di e ences be ween coun ies.
iii
While he explana o y powe , as measu ed by he R-squa ed, is
ela i ely low o he naï e eg ession model 1, adding u he
independen a iables imp o es he explana o y powe subs an-
ially o mo e han 0.104 o model 5. The explana o y powe o
ou c oss-sec ional eg essions is he e o e la gely in line wi h
p io esea ch on bank M&As (e.g., Bei el e al., 2004; Godda d
e al., 2012), and also mo e ecen esea ch on co po a e M&A
(e.g., Tunyi, 2021).
ix
The e a e no conce ns a ound mul icollinea i y wi h espec o
ou eg essions esul s, nei he o he eg essions using he
acqui e CARs as he dependen a iable, no o he eg essions
using he CARs o he acqui e s' i als. The co ela ion
2232 KOLARIC ET AL.
coe icien s o ou a iables o in e es a e gene ally below 0.5
(see Table S4 in he Online Appendix) and a iance in la ion ac-
o s a e all small.
x
Simila o he e en s udy, we also unde ake a sensi i i y analysis
o ou eg essions d opping Japanese a ge s, and subsequen ly
Japanese, Sou h Ko ean, and Taiwanese a ge s. While he esul s
o he eg ession on acqui e s' CARs emains la gely obus ,
albei he coe icien o DOMESTIC only eaching he 10% le el
o signi icance, he esul s o acqui e i als a e less obus o he
exclusion o hese coun ies. Fo hese eg essions, he coe icien
o DOMESTIC does no each common h esholds o s a is ical
signi icance, po en ially due o he educ ion in sample size by
mo e han hal , while he signi icance o he coe icien s o
ΔSIZE and ΔROE emain. We he e o e acknowledge ha he
esul ega ding i al e u ns o domes ic acquisi ions may be pa -
ially d i en by ce ain a ge coun ies. Howe e , as he esul s o
ou subsequen channel analysis o domes ic acqui e s in
Sec ion 5.1 emain una ec ed by he exclusion o hese a ge
coun ies, ou conclusions ega ding ma ke powe conside a ions
being a signi ican d i e o domes ic acqui e CARs o e all
emain alid.
xi
We also conside ed al e na i e measu es o cap u e ma ke powe
conside a ions, such as he Boone indica o , de eloped by Boone
(2008). Howe e , as he Boone indica o is es ima ed looking a
he ela ionship be ween banks' e iciency and hei ma ke
sha e, we would need de ailed p o i and cos da a on he bank
le el o es ima e banks' e iciency le els, and in pa icula o es i-
ma e he espec i e cos unc ions. Fo mos o ou sample banks,
his ype o g anula da a is un o una ely no a ailable, and we
he e o e o go he es ima ion o such indica o s.
xii
Adding he deal alue as a p oxy p o ides a conse a i e es i-
ma e o he ac ual changes. Looking a he subsample o acquisi-
ions o which we ha e a ge banks' o al asse , we ind ha he
a e age and median a io o deal alue o o al asse s is 29% and
12%, espec i ely. The co ela ion be ween deal alue and o al
asse s is high wi h 0.83, which sugges s i is a easonable p oxy.
xiii
As a obus ness es , we used di e en me hods o measu e he
cul u al dis ance be ween acqui e and a ge na ion. Besides
he absolu e di e ence, we used he ela i e dis ance and Euclid-
ean dis ance. The esul s emain unchanged.
xi
Regula o y a bi age appea s o play a less p ominen ole in
Eu ope. While Ca bo-Val e de e al. (2012) ind ha one o he
d i e s behind bank M&As in Eu ope is he possibili y o shi
isk on o EU sa e y ne s, Hagendo e al. (2012) ind no e i-
dence ha he p emiums a ge s ecei e a e associa ed wi h eg-
ula o y a bi age conside a ions.
x
This da abase is also used by Hous on e al. (2012), Ka olyi and
Taboada (2015) and, mo e ecen ly, by F ame e al. (2020). Since
egula o y egimes can change o e ime, we ollow Hous on
e al. (2012), Ka olyi and Taboada (2015), and F ame e al. (2020)
and di ide ou in es iga ion pe iod in o i e subpe iods, one o
hese pe iods co esponding o each su ey. Speci ically, we use
he i s su ey o he pe iod om 1995 o 1999, he second su -
ey o he pe iod om 2000 o 2003, he hi d one o he pe iod
om 2004 o 2008, he ou h su ey o he pe iod om 2009 o
2014 and he las su ey o he pe iod om 2015 o 2021. The
i e su eys we e conduc ed in 1998/1999, 2003, 2005/2006,
2011/2012 and 2017–2019, espec i ely.
x i
We acknowledge ha he a ge sample is compa a i ely small
as he sample only consis s o exchange-lis ed a ge s o whe e
he a ge 's ul ima e pa en is an exchange-lis ed inancial ins i-
u ion. As such, he esul s need o be ca e ully in e p e ed.
Howe e , gi en da a limi a ions wi h espec o non-public a -
ge s ha we would encoun e in any e en , we main ain ha
his analysis helps o unde s and he a ge selec ion p ocedu e
by Asian domes ic acqui e s and a e he e o e con inced ha i
o e s addi ional insigh s.
x ii
We also conduc ed a i al selec ion wi h he equi emen o he
same h ee-digi p ima y SIC code. This led o la gely he same
i als. A ma ch o he same ou -digi p ima y SIC code did no
achie e desi able esul s, as he ou -digi p ima y SIC codes
a ailable on Da as eam o non-U.S. inancial ins i u ions
appea o be e o p one. Fo example, non-U.S. comme cial
banks ha e almos exclusi ely a p ima y ou -digi SIC code o
6029 (‘Comme cial Banks, no elsewhe e classi ied’), whe eas
U.S. comme cial banks gene ally ollow a mo e de ailed
ca ego iza ion.
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SUPPORTING INFORMATION
Addi ional suppo ing in o ma ion can be ound online
in he Suppo ing In o ma ion sec ion a he end o his
a icle.
How o ci e his a icle: Kola ic, S., Kiesel, F., &
Schie eck, D. (2025). Banking ma ke
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1002/ij e.3012
KOLARIC ET AL.2235
APPENDIX A
A.1 |Va iable de ini ions
Va iable De ini ion
Main a iables
DOMESTIC Bina y a iable de ined as one i he acqui ing bank and a ge bank a e om he same Asian coun y, ze o
o he wise
ΔMARKET SHARE Es ima ed pe cen age change in acqui ing bank's ma ke sha e (measu ed in o al asse s o he coun y's o al
banking asse s in he yea p io o he announcemen ) in i s coun y o o igin p oxied by adding he deal alue,
as eco ded by he SDC Me ge s and Acquisi ions da abase, o he acqui ing bank's o al asse s
Deal con ol a iables
PRIVTAR Bina y a iable de ined as one i he a ge i m's public s a us was p i a e acco ding o he SDC Me ge s and
Acquisi ions da abase a he ime o he acquisi ion announcemen , ze o o he wise
VALUE Na u al loga i hm o he deal alue in U.S. dolla s as eco ded by he SDC Me ge s and Acquisi ions da abase
FOCUS Bina y a iable de ined as one i he acqui ing and a ge bank ha e he same p ima y SIC code as eco ded by
he SDC Me ge s and Acquisi ions da abase, ze o o he wise
TOEHOLD Bina y a iable de ined as one i he acqui ing bank had a less han 50% s ake in he a ge i m p io o he
M&A announcemen acco ding o he SDC Me ge s and Acquisi ions da abase, ze o o he wise
STAKE
ACQUIRED
Pe cen age o sha es ha we e acqui ed in he ansac ion acco ding o he SDC Me ge s and Acquisi ions
da abase
ALL CASH Bina y a iable de ined as one i he acquisi ion is paid exclusi ely in cash acco ding o he SDC Me ge s and
Acquisi ions da abase, ze o o he wise
Acqui e con ol a iables
LEVERAGE Ra io o a bank's o al deb o common equi y in he yea p io o he M&A announcemen (Wo ldscope code
WC08231)
ROE Bank's e u n on equi y in he yea p io o he M&A announcemen (Wo ldscope code WC08301)
ACQUIRER SIZE Bank's o al asse s in U.S. dolla s in he yea p io o he M&A announcemen (Wo ldscope code WC02999)
Ri al a iables
ΔSIZE Pe cen age di e ence o he o al asse s (Wo ldscope code WC02999) be ween he i al and acqui ing bank in
he yea p io o he M&A announcemen
ΔROE Pe cen age di e ence o he e u n on equi y (Wo ldscope code WC08301) be ween he i al and acqui ing bank
in he yea p io o he M&A announcemen
Cul u e a iables
ΔIDV Di e ence in Ho s ede's indi idualism e sus collec i ism dimension (Ho s ede, 2001; Ho s ede e al., 2010)
be ween he acqui ing bank's and a ge bank's na ion. Da a a ailable on Ho s ede's websi e (h ps://
gee ho s ede.com/). Fo ce ain coun ies whe e no alue was a ailable h ough Ho s ede's websi e, we made
he ollowing assump ions: We used China o Macau, Russia o Kazakhs an, Vie nam o Cambodia, A ab
coun ies o Oman, Saudi A abia, he Uni ed A ab Emi a es, and Qa a , India o S i Lanka, and China o
Mongolia
ΔMAS Di e ence in Ho s ede's masculini y e sus eminini y dimension (Ho s ede, 2001; Ho s ede e al., 2010)
be ween he acqui ing bank's and a ge bank's na ion. Da a a ailable on Ho s ede's websi e (h ps://
gee ho s ede.com/). Fo ce ain coun ies whe e no alue was a ailable h ough Ho s ede's websi e, we made
he ollowing assump ions: We used China o Macau, Russia o Kazakhs an, Vie nam o Cambodia, A ab
coun ies o Oman, Saudi A abia, he Uni ed A ab Emi a es, and Qa a , India o S i Lanka, and China o
Mongolia
ΔUAI Di e ence in Ho s ede's unce ain y a oidance index (Ho s ede, 2001; Ho s ede e al., 2010) be ween he
acqui ing bank's and a ge bank's na ion. Da a a ailable on Ho s ede's websi e (h ps://gee ho s ede.com/). Fo
ce ain coun ies whe e no alue was a ailable h ough Ho s ede's websi e, we made he ollowing assump ions:
2236 KOLARIC ET AL.
Va iable De ini ion
We used China o Macau, Russia o Kazakhs an, Vie nam o Cambodia, A ab coun ies o Oman, Saudi
A abia, he Uni ed A ab Emi a es, and Qa a , India o S i Lanka, and China o Mongolia
ΔPDI Di e ence in Ho s ede's powe dis ance index (Ho s ede, 2001; Ho s ede e al., 2010) be ween he acqui ing
bank's and a ge bank's na ion. Da a a ailable on Ho s ede's websi e (h ps://gee ho s ede.com/). Fo ce ain
coun ies whe e no alue was a ailable h ough Ho s ede's websi e, we made he ollowing assump ions: We
used China o Macau, Russia o Kazakhs an, Vie nam o Cambodia, A ab coun ies o Oman, Saudi A abia,
he Uni ed A ab Emi a es, and Qa a , India o S i Lanka, and China o Mongolia
Regula o y a iables
ΔTRANSPARENCY Di e ence in he Financial S a emen T anspa ency Index based on he Bank Regula ion and Supe ision
Su ey o he Wo ld Bank be ween he acqui ing bank coun y o o igin and a ge bank coun y o o igin
ΔSUPERVISORY Di e ence in he O icial Supe iso y Powe Index based on he Bank Regula ion and Supe ision Su ey o he
Wo ld Bank be ween he acqui ing bank coun y o o igin and a ge bank coun y o o igin
ΔRESTRICTION Di e ence in he Res ic ion on Banking Ac i i y Index based on he Bank Regula ion and Supe ision Su ey
o he Wo ld Bank be ween he acqui ing bank coun y o o igin and a ge bank coun y o o igin
Ta ge a iables
SIZE RATIO Ra io o he o al asse s o a ge o acqui e in he yea p io o he M&A announcemen (Wo ldscope code
WC02999)
ROE RATIO Ra io o he e u n on equi y o a ge o acqui e in he yea p io o he M&A announcemen (Wo ldscope
code WC08301)
TARGET SIZE Na u al loga i hm o he a ge 's o al asse s in U.S. dolla s in he yea p io o he M&A announcemen
(Wo ldscope code WC02999)
TARGET ROE Ta ge 's e u n on equi y in he yea p io o he M&A announcemen (Wo ldscope code WC08301)
TARGET
LEVERAGE
Ra io o a a ge bank's o al deb o common equi y in he yea p io o he M&A announcemen (Wo ldscope
code WC08231)
SUBSIDIARY Bina y a iable de ined as one i he a ge bank's ul ima e pa en is conside ed s ock lis ed by he SDC Me ge s
and Acquisi ions da abase, bu he a ge i sel is no , ze o o he wise
No e: This able de ines he main eg ession a iables and desc ibes hem in mo e de ail, including an iden i ica ion o hei da a sou ce. The a iables a e
di ided in o he main a iables, deal con ol a iables, acqui e con ol a iables, cul u al and egula o y a iables, and he a ge a iables used o he
eg ession analyses in Sec ion 6.
KOLARIC ET AL.2237
APPENDIX B
B.1 |De ails o i al selec ion p ocedu e
To selec app op ia e i als o each acqui ing bank and
exchange-lis ed a ge bank, we ollow a modi ied
app oach o Hanki e al. (2011). As a s a ing poin , we
de e mine all inancial ins i u ions in he coun y o o i-
gin o each acqui ing and a ge bank using Da as eam.
The de ini ion o a inancial ins i u ion ollows he one
o he acqui ing and a ge bank sample, including all
i ms wi h a p ima y SIC code anging om 6000 o
6289 and p ima y SIC codes 6712 and 6733. In o de o
a i e a he closes i al i m o each acqui ing and a -
ge ins i u ion, we use he ollowing selec ion p ocess:
Fi s , he acqui ing and a ge bank i als need o be
domiciled in he same coun y as he acqui e o a ge
and hey need o be lis ed on a s ock exchange. Second,
he i s wo digi s o he p ima y SIC code o acqui ing
and a ge bank need o ma ch wi h hose o he i al
i m.
x ii
Thi d, he h ee closes i al i ms, as measu ed
by ma ke capi aliza ion, a e selec ed. We chose he
h ee closes i als o ha e he same numbe o i al
obse a ions o each e en o a oid o e weigh ing o
unde weigh ing ce ain e en s. All obse a ions ha did
no yield a leas h ee i als a e d opped. Addi ionally,
he e u nonequi yo he i albankin heyea p io
o he announcemen and i s s ock p ice da a mus be
a ailable om 272 days p io o he M&A announce-
men day o 5 days a e i .
The i s equi emen is somewha es ic i e,
especially o smalle ma ke s wi h lowe da a qual-
i y, such as Malaysia o he Philippines, and o
la gely consolida ed ma ke s, such as many o he
Eu opean coun ies, whe e ew exchange-lis ed inan-
cial ins i u ions emain. Ne e heless, in o de o
measu e he impac o he inancial sec o consolida-
ion in a gi en coun y and he subsequen changes
in ma ke concen a ion a ios, his is a necessa y
equi emen . Fu he mo e, by equi ing a ma ch o
he wo-digi SIC code a he han he ou -digi SIC
code, we ensu e ha he i als a e in a simila line
o business.
Following his selec ion p ocedu e, we ind 1398
i als o he acqui ing bank sample, meaning ha we
ha e h ee sui able i als o 466 o ou 486 e en s. Wi h
espec o he a ge s, we ob ain a sample o 243 i als,
ha is we ha e h ee i als o 81 ou o ou 107 e en s.
Table B1 gi es a b ie o e iew o he ma ke capi aliza-
ion o he i al sample in ela ion o he acqui ing and
a ge bank and he equency o obse a ions o hei
espec i e wo-digi SIC codes.
2238 KOLARIC ET AL.
