Wealth effect of mergers & acquisitions in emerging market: A case of Pakistan’s banking sector

Authors

Sana Tauseef, Institute of Business Administration Karachi, Pakistan
Mohammad Nishat, Institute of Business Administration Karachi, Pakistan

Abstract

This study investigates the short-term market response associated with the announcement of seven merger and acquisition deals in the banking sector of Pakistan during the period 2003 to 2008 using the event study methodology. The results indicate statistically significant investor reactions around the merger announcements. For individual target and bidder banks, the cumulative abnormal returns (CARs) range from significant positive to significant negative. The combined mean CAR for the bidder group is significant positive and for target group, the mean CAR is significant negative. The mean CAR for the combined banks in the domestic mergers is also positive but is largely impacted by the substantial positive CAR of one bidder bank.

Keywords

Merger & Acquisition, Emerging market, Banking, Corporate finance

DOI

https://doi.org/10.54784/1990-6587.1269

Journal of Economic Literature Subject Codes

G34, G21

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Tauseef, S., & Nishat, M. (2014). Wealth effect of mergers & acquisitions in emerging market: A case of Pakistan’s banking sector. Business Review, 9(2), 24-39. Retrieved from https://doi.org/10.54784/1990-6587.1269