Abstract
M&A is an important aspect of growing a business, and FDIC-insured banks use it to organically and inorganically further financial and operational traction. In this research, a theoretical framework for how a bank can decrease competition in their market and increase profitability through a logical shift from perfect competition to a monopoly (ending up at monopolistic competition), decrease costs in the short-run and feel economies of scale in the long-run is introduced. Then, a literature review introduces sources that provide context for this argument as well as empirical tests to similar hypotheses. The hypothesis, M&A in banking decreases completion and increases profits is tested using a control and target sample and an OLS regression. The data collected at this point in time failed to reject this null hypothesis. However, a further non-dummy OLS regression is introduced which measures yet-to-be-acquired firms’ characteristics against profitability for an acquirer when controlling for size. Finally, a variance analysis is introduced which benchmarks Net Income growth rates across banks that did M&A and those that did not during an equivalent time period, showing mixed results.
Advisor
Tian, Huiting
Department
Business Economics
Recommended Citation
Varner, David, "Banking Mergers & Acquisitions (M&A) During the Financial Crisis: A Long-Term Strategy?" (2023). Senior Independent Study Theses. Paper 10454.
https://openworks.wooster.edu/independentstudy/10454
Disciplines
Business
Publication Date
2023
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
© Copyright 2023 David Varner