Journal of Financial Services Research

, Volume 36, Issue 2–3, pp 87–110 | Cite as

Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature

  • Robert DeYoung
  • Douglas D. Evanoff
  • Philip Molyneux
Article
First Online:
Received:
Accepted:

Abstract

This paper provides a review of the recent financial institution mergers and acquisition (M&A) literature covering over 150 studies. Several robust themes emerge in the post-2000 literature. North American bank mergers are (or can be) efficiency improving, although the event-study literature presents a mixed picture regarding stockholder wealth creation. In contrast, European bank mergers appear to have resulted in both efficiency gains and stockholder value enhancement. There is robust evidence linking high CEO compensation to merger activity and strong implications that deals can be motivated by the desire to obtain ‘too-big-to-fail’ status and reap the associated subsidies. Evidence on the impact of both geographic and product diversification via merger is mixed. There is growing evidence that financial institution M&As can adversely impact certain types of borrowers, depositors, and other external stakeholders.

Keywords

Banks Financial institutions Literature review Mergers and acquisitions 

JEL

G21 G34 
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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  • Robert DeYoung
    • 1
  • Douglas D. Evanoff
    • 2
  • Philip Molyneux
    • 3
  1. 1.University of KansasLawrenceUSA
  2. 2.Federal Reserve Bank of ChicagoChicagoUSA
  3. 3.Bangor UniversityBangorUK

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