How Did the Asian Stock Markets React to Bank Mergera after the 1997 Financial Crisis?

Céline Meslier-Crouzille (1) , Laetitia Lepetit (1) , Carlos C. Bautista (2)

1 LAPE - Laboratoire d'Analyse et de Prospective Economique
2 College of Business Administration

The objective of this paper is to empirically assess the stock market reaction to the announcement of bank mergers and acquisitions (M&As) in eight East Asian countries over the 1997-2003 period. M&As are classified according to the status of entity, the time period of the deal and the maturity of the banking system. A bivariate GARCH model is used to estimate abnormal returns taking beta conditional variability into account. We find that the market reacted negatively to M&As during the crisis period (1997-2000) and also in the less mature banking systems (Indonesia, Malaysia, the Philippines, South Korea and Thailand).

Mots clés: Mergers and Acquisitions; Banking; Event study; Consolidation process

Domaines: Economies et finances

Céline Meslier-Crouzille, Laetitia Lepetit, Carlos C. Bautista. How Did the Asian Stock Markets React to Bank Mergera after the 1997 Financial Crisis?. Pacific Economic Review, 2008, 13 (2), pp.171-182. ⟨10.1111/j.1468-0106.2008.00395.x⟩. ⟨hal-00828518⟩