An analysis of mergers and acquisitions in the Turkish banking sector

Mumcu, Ayşe and Zenginobuz, Unal (2002): An analysis of mergers and acquisitions in the Turkish banking sector. Published in: Research in the Middle East Economics , Vol. Volume, (2005): pp. 133-162.

Abstract

We explore various aspects of mergers and acquisitions in the banking industry within a simple model that allows explicit comparison of sector performance before and after the mergers and acquisitions. The industry structure we look at involves a few dominant banks and a competitive fringe, which we take it as the structure most likely to resemble the Turkish banking industry in the aftermath of the ongoing restructuring process. Using a reasonable set of parameters to simulate the model, we do comparative statics exercises regarding the impact of mergers among domestic as well as with foreign banks on equilibrium outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: banking; mergers and acquisitions; imperfect competition; Turkey
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; 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

References

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BRSA, 2001. ‘‘Towards a Sound Turkish Banking Sector’’, May 15. <http://www.bddk.org.tr/english/mainpage/index_eng.htm> (December 30, 2001).

Demirgüç-Kunt, A., Levine, R., 1999. Bank-Based and Market-Based Financial Systems: Cross Country Comparisons. Policy Reseach Working Paper No. 2143, The World Bank, Washington D.C.

Dermine, J., 1999. The Economics of Bank Mergers in the European Union, A Review of the Public Policy Issues. INSEAD Working Paper No. 99/35/FIN.

Freixas, X., Rochet, J.C., 1996. Microeconomics of Banking. MIT, Cambridge, Massachusetts.

Mumcu-Serdar, A., Zenginobuz, E. Ü., Orhan, M. A., 2001. The Likely Impact of Mergers and Acquisitions on the Banking Sector: A Stylized Model and Simulations. Boğaziçi University Research Papers, ISS/EC 2001-02.