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

Sascha Kolaric; Dirk Schiereck; Florian Kiesel

doi:10.2139/ssrn.2795651

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 language	English
Number of pages	56
DOIs	https://doi.org/10.2139/ssrn.2795651
Publication status	E-pub ahead of print - 13 Apr 2022

Keywords

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

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10.2139/ssrn.2795651

Cite this

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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.",

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AB - 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.

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KW - banks

KW - rival reactions

KW - market power

KW - emerging markets

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M3 - Working paper

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

Abstract

Keywords

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