Athanasoglou, Panayiotis and Brissimis, Sophocles (2004): The effect of M&A on bank efficiency in Greece. Published in: RePEc No. Economic Bulletin 22 (January 2004): pp. 7-31.
Download (4MB) | Preview
This paper studies the impact of recent mergers and acquisitions(M&As)on the cost and profit efficiency of banks in Greece. To this end, three methods have been applied:(i)analysis of developments in certain cost and profit indicators and their dispersion for bank groups according to their size;(ii)calculation of cost and profit inefficiency(relative to the best performer); and(iii)analysis of individual cases of M&As in terms of changes in bank costs and profitability relative to banks not involved in M&As. Additionally, the paper assesses the existence of economies of scale and the extent to which they are exploited through M&As. The empirical results indicate that M&As, in particular those involving small banks, had a positive effect on cost and profit efficiency and that scope exists for further improvement in efficiency. Also, M&As helped large banks to exploit economies of scale, which previously were found in small to medium- sized banks.
|Item Type:||MPRA Paper|
|Original Title:||The effect of M&A on bank efficiency in Greece|
|English Title:||The effect of M&A on bank efficiency in Greece|
|Keywords:||Mergers and acquisitions; bank cost and profit efficiency; economies of scale;|
|Subjects:||G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
|Depositing User:||PANAYIOTIS P. ATHANASOGLOU|
|Date Deposited:||06. Jul 2011 11:11|
|Last Modified:||12. Feb 2013 17:53|
Athanasoglou, P. P. (1998)“The European banking system and the capital market: its role in the development of the European Union”), Bulletin of the Hellenic Bank Association, No. 15, 53-60.
Voloudakis, E. (2002),“Bank mergers and acquisitions: A first assessment”, Epilogi(Trends: The Greek economy in 2002).
Akhavein, J. A., A. N. Berger and D. Humphrey (1997), “The effects of megamergers on efficiency and prices: Evidence from a bank profit function”, Review of Industrial Organization, 12, 75-103.
Allen, L. and A. Rai (1996),“Operational efficiency in banking: An international comparison”, Journal of Banking and Finance, 18, 665-72.
Altunbas, Y. and P. Molyneux (1996),“Economies of scale and scope in European banking”, Applied Financial Economics, 6, 367-75.
Altunbas, Y., P. Molyneux and J. Thornton (1997), “Big-bank mergers in Europe: An analysis of the cost implications”, Economica, 64, 317-29.
Berger, A.N. (1998),“The efficiency effects of bank mergers and acquisitions: A preliminary look at the 1990s data”, in Y. Amihud and G. Miller (eds) Bank Mergers and Acquisitions, Kluwer Academic Publishers, 79-111.
Berger, A.N., R.S. Demsetz and P.E. Strahan(1999), “The consolidation of the financial services industry: Causes, consequences and implications for the future”, Journal of Banking and Finance, 23, 135-94.
Berger, A.N. and D. Humphrey (1992), “Megamergers in banking and the use of cost efficiency as an antitrust defense”, The Antitrust Bulletin, 37, 541-600.
Berger, A.N. and L.J. Mester (1997), “Inside the black-box: What explains differences in the efficiencies of financial institutions?” Journal of Banking and Finance, 21, 895-947.
Boyd, J. H. and S. L. Graham (1998), “Consolidation in US Banking: Implications for Efficiency and Risk”, in Y. Amihud and G. Miller(eds)Bank Mergers and Acquisitions, Kluwer Academic Publishers, 113-35.
Chamberlain, S.L.(1998), “The effect of bank ownership changes on subsidiary-level earnings”, in À. Amihud and G. Miller(eds)Bank Mergers and Acquisitions, Kluwer Academic Publishers, 137-72.
ECB (2000), “Mergers and acquisitions involving the EU banking industry – facts and implications”.
Economist (1998), “Merger mania, sobering statistics”, 20 June.
Group of Ten (2001),“The effects of consolidation on efficiency, competition and credit flows”, Report on Consolidation in the Financial Sector, Chapter V, 247-307.
Hanweck, G.A. and B. Shull (1999), “The bank merger movement: efficiency, stability and competitive policy concerns” The Antitrust Bulletin, 44, 251-84.
Hughes, J.P. and L.J. Mester (1998), “Bank capitalization and cost: Evidence of scale economies in risk management and signaling”, Review of Economics and Statistics, 80, 314-25.
Huizinga, H.P., J.H.M. Nelissen and R.V. Vennet(2001), “Efficiency effects of bank mergers and acquisitions in Europe”, Tinbergen Institute Discussion Paper No. 88.
Huizinga, H.(2003), “EMU and financial market structure”, in M. Buti and A. Sapir(eds)EMU and Economic Policy in Europe, Edward Elgar, 303-33.
Kwan, S.H. and J.A. Wilcox (1999), “Hidden cost reductions in bank mergers: Accounting for more productive banks”, Federal Reserve Bank of San Francisco, Working Papers in Applied Economic Theory, No. 10.
Linder, J. C. and D.B. Crane (1992),“Bank mergers: Integration and profitability”, Journal of Financial Services Research, 7, 35-55.
Pilloff, S.J. and A.M. Santomero (1998), “The value effects of bank mergers and acquisitions,” in Y. Amihud and G. Miller(eds)Bank Mergers and Acquisitions, Kluwer Academic Publishers, 59-78.
Rhoades, S.A.(1998), “The efficiency of bank mergers: An overview of case studies of nine mergers”, Journal of Banking and Finance, 22, 273-91.
Vennet, R.V.(1996),“The effect of mergers and acquisitions on the efficiency and profitability of EC credit institutions”, Journal of Banking and Finance, 20, 1531-58.
Vennet, R.V.(2002), “Cost and profit efficiency of financial conglomerates and universal banks in Europe”, Journal of Money, Credit, and Banking, 34, 254-82.