, Volume 1, Issue 2, pp 161-182

The benefits of geographical and product expansion in the financial service industry

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Residual analysis techniques are used to evaluate acquiring firm shareholder perceptions of the benefits of product expansion by nonbanking firms into the banking industry and of the relaxation of restrictions on interstate banking. The results are consistent with other merger studies that fail to find significant returns to shareholders of acquiring firms and suggest either that such benefits do not exist or they are distributed to the shareholders of the acquired firm.

Finance Department, University of Kentucky
School of Business, University of North Carolina at Chapel Hill