The impact of mean reversion of bank profitability on post-merger performance in the banking industry

Journal of Banking and Finance

Volumn 30, Issue 12, 2006, Pages 3503-3517

  Knapp, Morris ^a   Gart, Alan ^b   Chaudhry, Mukesh ^b  

^a MIAMI DADE COLLEGE   (United States)

^b INDIANA UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

Acquisitions; Banking; Mean reversion; Mergers

Indexed keywords

EID: 33750892400     PISSN: 03784266     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbankfin.2006.01.005     Document Type: Article

References (20)

1. Akhavein J.D., Berger A.N., and Humphrey D.B. The effects of megamergers on efficiency and prices: Evidence from a bank profit function. Review of Industrial Organization 12 (1997) 95-134
2. Berger, A.N., DeYoung, R., 2002. Technological progress and the geographic expansion of the banking industry. In: Paper Presented at the Eastern Finance Association Meeting, Baltimore, MD.
3. Berger A.N., and Humphrey D.B. Megamergers in banking and the use of cost efficiency as an antitrust defense. The Antitrust Bulletin 37 (1992) 541-600
4. Brown S.J., Goetzmann W.N., Ibbotson R.G., and Ross S.A. Survivorship bias in performance studies. Review of Financial Studies 5 (1992) 553-580
5. Cornett M.M., and Tehranian H. Changes in corporate performance associated with bank acquisitions. Journal of Financial Economics 31 (1992) 211-234
6. Craig B., and dos Santos J.C. The risk effects of bank acquisitions. The Federal Reserve Bank of Cleveland, Economic Review (1997) 25-35
7. DeLong G.L. Stockholder gains from focusing versus diversifying bank mergers. Journal of Financial Economics 59 (2001) 221-252
8. DeLong G.L. Does long-term performance of mergers match market expectations? Evidence from the U.S. banking industry. Financial Management 35 (2003) 5-25
9. DeLong, G.L., DeYoung, R. 2004. Learning by Observing: Information Spillovers in the Execution and Valuation of Commercial Bank M&As, Federal Reserve Bank of Chicago, Working Paper 2004-17.
10. DeYoung R. Management quality and X-inefficiency in national banks. Journal of Financial Services Research 13 (1998) 5-22
11. Fama E.F., and French K.R. Forecasting profitability and earnings. Journal of Business 73 (2000) 161-175
12. Fama E.F., and McBeth J.D. Risk, return and equilibrium: Empirical tests. Journal of Political Economy 81 (1973) 607-636
13. Houston J.F., James C.M., and Ryngaert M.D. Where do merger gains come from? Bank mergers from the perspective of insiders and outsiders. Journal of Financial Economics 60 (2001) 285-331
14. Johnston J., and DiNardo J. Econometric Methods. fourth ed. (1997), McGraw-Hill, New York
15. Kraus A., and Litzenberger R. Skewness preference and the valuation of risk assets. The Journal of Finance 31 (1976) 1085-1100
16. Lichtenberg F.R. Testing the convergence hypothesis. The Review of Economics and Statistics 76 3 (1994) 576-579
17. Peristiani S. Do mergers improve the X-efficiency and scale efficiency of U.S. banks? Evidence from the 1980's. Journal of Money, Credit and Banking 29 (1997) 326-337
18. Pilloff S.J. Performance changes and stockholder wealth creation associated with mergers of publicly traded banking institutions. Journal of Money, Credit and Banking 28 (1996) 294-310
19. Rhoades, S.A., 1994. A Summary of Merger Performance Studies in Banking, 1980-93, and an Assessment of "Operating Performance" and "Event Study" Methodologies, Federal Reserve Board of Governors, Staff Study 167.
20. Walter I. Mergers and Acquisitions in Banking and Finance: What Works, What Fails, and Why (2004), Oxford University Press, New York