Impact of the financial crisis on cross-border mergers and acquisitions and concentration in the global banking industry

The global banking industry has seen dramatic changes in the past 40 years. Most recently, the financial liberalization of emerging markets and the global financial crisis have significantly impacted the market share of banks worldwide. This article investigates the impact of the 2007–2008 financial crisis on cross-border mergers and acquisitions (M&As) in the banking sector and emphasizes the role of emerging-market banks in the postcrisis consolidation trend. Using M&A data and concentration data over the period 2000–2013, our analysis indicates that the financial crisis had a significant impact on worldwide M&As, especially on the direction of the transactions. Emerging-market banks appear to be major acquirers in the postcrisis period, targeting both neighboring countries and developed economies in Europe. We also observe an increase in bank concentration in developed markets most hit by the financial crisis, especially in the United States and the United Kingdom, whereas bank concentration decreased in emerging markets.

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

During the recent decade, the world has witnessed the rapid growth of MNEs from emerging economies. Their increasing participation in cross-border mergers and acquisitions has raised great attention in the extant literature. This study evaluates the value creation from these cross-border transactions from two representative emerging countries, namely China and India, and determines factors that result in the different performance of these international acquisition activities. Cross-border acquisitions conducted by these countries’ companies indeed lead to significant shareholder wealth creation. Furthermore, Indian shareholders are more likely to benefit from deals in small cultural distance countries, while Chinese investors gain from the cross-border expansion of manufacturing companies. Location also affects the performance of cross-border acquisitions, with acquisitions into developed countries generating higher returns to shareholders. Our sample consists of 203 Indian and 63 Chinese cross-border deals over the period 2000–2010 and our results hold after controlling for various deal-level and firm-level characteristics.

Euphoria in financial markets: how Indian companies generate value in their cross-border acquisitions

In this paper, we investigate the effect of euphoria on returns derived by Indian companies in their cross-border acquisitions. Cognitive legitimacy generated at the country level facilitated firms in deriving higher value from internationalization. In addition, overoptimism after the legitimacy-building event led to euphoria in financial markets and short-term abnormal returns. Hence we argue that the springboard effect created by legitimacy is short-lived, as euphoria fades away over time. Using cross-border and domestic acquisitions by Indian companies during 1999-2009, and controlling for fundamental factors, both financial and non-financial, we find support for our euphoria hypothesis. Because of overoptimism, Indian companies experienced short-term abnormal returns in their cross-border acquisitions in the few years following the legitimation process, but not in later years.

Long-term performance of mergers and acquisitions in ASEAN countries

The study looks at mergers and acquisitions (M&As) in ASEAN countries and examines the post-M&A performance using data from 2001 to 2012. The industry-adjusted operating performance tends to decline in the 3 years following an M&A. Yet, the results suggest that M&As completed during the financial crisis are more profitable than those implemented before and/or after the crisis. We argue that this is mainly due to the synergies created between the firms’ resources during the crisis which augur well for firms’ economic performance. We find that, during the crisis, certain characteristics of the firms like the relative size of the target, cross-border nature of deals, acquirer's cash reserves and friendly nature of deals are important determinants of long-term post-M&A operating performance. However, for M&As during the crisis, there appears to be no relationship between performance and firms’ characteristics linked to M&A activity such as payment method, industry relatedness and percentage of target's share acquired.

ADR in aviation: European and national perspectives

The air transport sector generates the largest share of cross-border consumer complaints, as a proportion of complaints received by the ECC-Net. Since the foundation of the ECC-Net in 2005, air passenger claims have made up around one fifth of the total caseload most years. A pan-European framework of bodies that handle consumer to business disputes will be implemented through the consumer ADR directive.4 Taking these developments into consideration, the aviation industry is an interesting sector to study. This paper looks at dispute resolution for air passengers in the United Kingdom (UK) and Germany, as well as at European level.

Cultural cooperation, institution building, and metropolitan governance in decentralizing Indonesia

The institutional turn in metropolitan governance has been influenced to a considerable degree by a rational choice approach, which views metropolitan governance as essentially created by local actors to reduce the transaction costs of inter-jurisdictional public-service provision. Another influential theoretical route follows a historical approach, which emphasizes the role of the state structure in producing formal institutions to enable governance at the regional level. Both approaches tend to be formalistic, simplistic and deterministic in nature, thus neglecting the dynamic interactions between the actors and their more informal, intangible, yet more basic, legitimate institutions, such as culture. This article examines the dynamic role of culture in metropolitan governance building in the context of decentralizing Indonesia. The analysis focuses on ‘best-practice’ experiences of metropolitan cooperation in greater Yogyakarta, where three neighbouring local governments known as Kartamantul have collaboratively performed cross-border infrastructure development to deal with the consequences of extended urbanization. We draw on sociological institutionalism to argue that building this metropolitan cooperation has its roots in the capacity of the actors to use and mobilize culture as a resource for collaborative action.