Wealth creation through market concentration in the Asia-Pacific banking sector

Sascha Kolaric, Dirk Schiereck, Florian Kiesel

Research output: Working paper

Abstract

We analyze the financial sector consolidation in the Asia-Pacific region using a sample of 581 bank merger and acquisition (M&A) announcements. We find that Asian bidders and their rivals benefit from consolidation, particularly in case of larger bidders and national transactions. Tar-gets and their rivals likewise gain, with larger banks more likely targeted by Asian institutions. We also document significant increases in target countries' market concentration ratios following transactions. Contrary to most research focusing on the U.S. and Europe, we provide strong evidence that market power considerations are the dominant motivation behind bank M&As in the Asia-Pacific region.
Original languageEnglish
Number of pages56
DOIs
Publication statusE-pub ahead of print - 13 Apr 2022

Keywords

  • mergers and acquisitions (M&As)
  • banks
  • rival reactions
  • market power
  • emerging markets

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