Resource title

Determinants of cross-border bank acquisitions in transition economies: a latent class analysis

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Resource description

We analyze the microeconomic determinants of cross-border bank acquisitions in 16 transition economies over the period 1996-2006. By using a latent class discrete choice model we explicitly incorporate the macroeconomic and institutional heterogeneity of the transition economies into our analysis. We find that foreign banks target relatively large and efficient banks when they enter transition economies with weak institutions. This evidence provides support for the market power hypothesis. However, when foreign banks enter more developed transition economies that have made progress in economic reform, they acquire less efficient banks. This result is in line with the efficiency hypothesis.

Resource author

Tigran Poghosyan, Jakob de Haan

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26417

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Adapt according to the presented license agreement and reference the original author.