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U.S. bank M&As in the post-Dodd–Frank Act era: Do they create value?

Leledakis, George N and Pyrgiotakis, Emmanouil G (2019) 'U.S. bank M&As in the post-Dodd–Frank Act era: Do they create value?' Journal of Banking & Finance, Online. ISSN 0378-4266

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Abstract

We analyze the impact of the Dodd–Frank Act on the shareholder wealth gains using a sample of 640 completed U.S. M&As announced between 1990 and 2014. Our results indicate a positive DFA effect on announcement period abnormal returns in small bank mergers. In fact, mergers with combined firm assets of less than $10 billion create more shareholder value after the DFA, than ever before. This positive announcement effect in small deals appears to be linked with merger-related compliance cost savings and profitability improvements. By examining long-run abnormal returns, we find that the documented DFA effect on small deals announcement abnormal returns does not disappear overtime. Finally, we do not find such effects for non-U.S. bank M&As over the same period.

Item Type: Article
Uncontrolled Keywords: Dodd-Frank regulation, Shareholder wealth, Event study, Financial performance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 24 Jan 2020 15:56
Last Modified: 04 Mar 2021 16:15
URI: http://repository.essex.ac.uk/id/eprint/26569

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