Jv and Acuisitions

The Journal of Financial Research Vol. XXIX, No. 4 Pages 503522 pass 2006 THE USE OF ACQUISITIONS AND JOINT VENTURES BY U.S. BANKS EXPANDING ABROAD Kimberly C. Gleason Florida Atlantic University Ike Mathur Southern Illinois University Roy A. Wiggins III Bentley College Abstract We see to it international bank expansions, which ar classified as banking (scale related) or nonbanking (complementary) moves into genuine or developing markets. The market responds favorably to expansions with joint ventures by U.S. banks, and insignificantly to expansions through acquisitions. Accounting and in operation(p) performances (for joint venture banks) and long-period holding returns (for acquisitions) show improvement in the two years following the announcement. Systematic risk declines for the standard overall, for acquisitions, and for expansions into developing countries. In general, scale or developing expansions are better pursued through acquisitions, whereas complementary or developed expansions are best pursued through joint ventures. JEL classification: F21, G15, G21, G34 I. Introduction Regulatory changes over the past decade down made it easier for commercial banks to enter geographic and product markets that were unenviable to access, if not prohibited.

This deregulation has facilitated expansions abroad, as well as consolidations and plus acquisitions. We examine the opportunities facing U.S. commercial banks expanding abroad using two acquisitions and joint ventures. Researchers show that joint ventures are wealth-enhancing and effective alternatives to acquisitions in nonfinancial sectors (e.g., Johnson and Houston 2000). More recent studies focus We thank an anonymous reviewer of this journal, William T. Moore (the former editor), Allen Berger, Marcia Cornett, Joe Hughes, Shane Johnson, and participants of the 13th Australasian Finance and Banking Conference and the Carnegie Bosch proves 5th International Conference in Berlin,... If you deprivation to get a full essay, order it on our website: Ordercustompaper.com

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