Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure

Ullah, Nazim and Mat Nor, Fauzias and Abu Seman, Junaidah and fadly, ahmed and ainna, nur (2023): Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure. Published in:

Abstract

Merger and acquisition known as a market expansion strategy. This paper examines several factors associated with M&A namely bank size, intermediary role, modes of financing, bank-specific variables, and macro-economic variables on the operational performance and stability along with the mediation role of market structure for Islamic banks. This paper employs panel data techniques and SEM to analyse a set of unbalanced panel samples of 10 Islamic banks during 2004Q1 to 2020Q4 from six countries, namely Qatar, Kuwait, Saudi Arabia, United Arab Emirate, Bahrain, and Pakistan. The results indicate that M&A improve post-M&A performance of Islamic banks while stability does not improve. Interestingly, there is no mediation effects of market structure on the relationship between M&A, operational performance, and stability. Policymakers should emphasis M&A towards the Islamic bank, however, to be stable, it may take more than 5 years.

• Item Type: MPRA Paper
• Language: English
• Keywords: Merger and Acquisition (M&A); operational performance; bank stability; market structure; Islamic banks.
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance

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