Determinants of bank growth choice

Cyree, Ken B.; Wansley, James W.; Boehm, Thomas P.

doi:10.1016/s0378-4266(99)00049-7

Cited by 29 publications

(26 citation statements)

References 21 publications

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“…While there are numerous empirical studies investigating the relationship between financial characteristics and acquisition likelihood of industrial (i.e., non‐financial) firms (e.g., Levine and Aaronovitch, 1981; Harris et al, 1982; Hasbrouck, 1985; Ambrose and Megginson, 1992; Powell, 1997; Gonzalez et al, 1997; Ali‐Yrkko et al, 2005), investigation of such characteristics for the banking industry has been limited (Cyree et al, 2000; Wheelock and Wilson, 2000). Furthermore, previous studies on bank acquisitions have traditionally focused on examining the financial characteristics of US banks (Hannan and Rhoades, 1987; Meric et al, 1991; Moore, 1996; Wheelock and Wilson, 2000, 2004; Hannan and Pilloff, 2009), while there have been relatively few studies for the EU countries.…”

Section: Introductionmentioning

confidence: 99%

What Drives Acquisitions in the EU Banking Industry? The Role of Bank Regulation and Supervision Framework, Bank Specific and Market Specific Factors

Pasiouras¹,

Tanna²,

Gaganis³

2011

Financial Markets, Institutions &Amp; Instruments

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We investigate the determinants of commercial bank acquisitions in the former fifteen countries of the European Union by evaluating the impact of bank-specific measures, such as size, growth and efficiency of banks, and external influences reflecting industry level differences in the regulatory and supervision framework, market environment and economic conditions. Our empirical analysis involves multinomial logit estimation at various levels in order to identify those characteristics that most consistently predict targets and acquirers from a sample of over 1400 commercial banks. The overall results indicate that, relative to banks that were not involved in the acquisitions, (i) targets and acquirers were significantly larger, less well capitalized and less cost efficient, (ii) targets were less profitable with lower growth prospects, and acquirers more profitable with higher growth prospects, (iii) external factors have affected targets and acquirers differently, and their effects have not been consistent or robust to sample size changes.

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Section: Introductionmentioning

confidence: 99%

What Drives Acquisitions in the EU Banking Industry? The Role of Bank Regulation and Supervision Framework, Bank Specific and Market Specific Factors

Pasiouras¹,

Tanna²,

Gaganis³

2011

Financial Markets, Institutions &Amp; Instruments

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“…finds that restricted branching in the U.S. has been a major cause of bankruptcy Wall (2004). presents results showing that branch office deregulation tends to deter the creation of companies in some regions and to foster it in others Cyree et al (2000). analyzes the determinants of bank growth and find that larger banks tend to grow more abroad.…”

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confidence: 99%

The effects of geographic expansion on the productivity of Spanish savings banks

2009

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“…Specifically, Cyree et al. () investigate the factors that impact the method of growth for banks . The authors study both internal and external means of growth and find that various bank‐specific characteristics such as performance, bank structure, and regulatory environment can influence the growth method employed by a given bank.…”

Section: Insurer Growth Strategiesmentioning

confidence: 99%

Insurer Growth Strategies

Fier

Liebenberg

2017

Risk Manage Insurance Review

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We study corporate growth strategy within the U.S. property–casualty insurance industry—where firms are required to report uniquely detailed operating information. We present and test two hypotheses related to the manner in which firms choose to grow: the pecking order hypothesis and the managerial discretion hypothesis. Our results imply that insurers follow a general pecking order of growth strategies, where they tend to grow first by entering new states, then by adding new lines of business, and finally through acquisitions. This order is consistent with firms initially choosing to grow in the least costly and complex manner and subsequently choosing more costly and complex methods. We also find evidence in support of the managerial discretion hypothesis as mutual insurers are less likely to choose to grow and, when they do, they tend to select less complex growth methods.

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Determinants of bank growth choice

Cited by 29 publications

References 21 publications

What Drives Acquisitions in the EU Banking Industry? The Role of Bank Regulation and Supervision Framework, Bank Specific and Market Specific Factors

What Drives Acquisitions in the EU Banking Industry? The Role of Bank Regulation and Supervision Framework, Bank Specific and Market Specific Factors

The effects of geographic expansion on the productivity of Spanish savings banks

Insurer Growth Strategies

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