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Regulations, Supervision Approaches and Acquisition Likelihood in the Asian Banking Industry

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Abstract

We investigate the association between the regulatory and supervision framework and the likelihood of being involved in acquisitions either as acquirer or target in the Asian banking industry over the period 1998–2004. The sample consists of 473 commercial banks operating in 9 markets, a total of 2,693 yearly observations. We use information from the new database of the World Bank and examine various regulations such as the level of accounting and information disclosure requirements, the restrictions on bank activities, the degree of official disciplinary power, and capital adequacy requirements. Our results suggest that the latter two influenced the probability of becoming a target or acquirer; however, restriction on activities and disclosure requirements had no impact on the acquisition likelihood.

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Authors and Affiliations

  1. School of Management, University of Bath, Bath, BA2 7AY, UK

    Fotios Pasiouras

  2. Financial Engineering Laboratory, Department of Production Engineering & Management, Technical University of Crete, University Campus, Chania, 73100, Greece

    Chrysovalantis Gaganis & Constantin Zopounidis

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  1. Fotios Pasiouras
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  2. Chrysovalantis Gaganis
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  3. Constantin Zopounidis
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Correspondence to Constantin Zopounidis.

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Pasiouras, F., Gaganis, C. & Zopounidis, C. Regulations, Supervision Approaches and Acquisition Likelihood in the Asian Banking Industry. Asia-Pac Finan Markets 15, 135–154 (2008). https://doi.org/10.1007/s10690-008-9075-z

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