Abstract

This paper examines operating performance around commercial bank mergers. We find that industry-adjusted operating performance of merged banks increases significantly after the merger, large bank mergers produce greater performance gains than small bank mergers, activity focusing mergers produce greater performance gains than activity diversifying mergers, geographically focusing mergers produce greater performance gains than geographically diversifying mergers, and performance gains are larger after the implementation of nationwide banking in 1997. Further, we find improved performance is the result of both revenue enhancements and cost reduction activities. However, revenue enhancements are most significant in those mergers that also experience reduced costs.

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Additional Information

ISSN
1538-4616
Print ISSN
0022-2879
Pages
pp. 1013-1050
Launched on MUSE
2006-06-21
Open Access
No
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