Financial Regulation Policy Uncertainty and Mergers and Acquisitions by European Banks
This paper seeks to determinethe effect of policy uncertainty and financial regulation policy uncertainty on the aggregate level of mergers and acquisitions in Europe,the firm-level acquisition decision for European banks, and the channels it operates through. The first part of this study focusses on the aggregate number of deals and valueusing a vector auto regression, finding a drop inaggregate European volume and value figuresfollowing a shock in policy uncertainty. In the second part, no significant effect isfound of policy uncertainty or financial regulation policy uncertaintyon the firm-level acquisition decision for European banks, using a logistic regression model. The finalpart of this research focusses onthe channels through which (financial regulation) policy uncertainty affects firm-level acquisition decisionsfor European banks. The results show thatacquisition decisions for European banks areinfluenced by the interim-risk channel, which concerns value fluctuations of the target firm between announcement and completion.European banks postpone investments prior to times of financial regulation policy uncertainty because of the lengthened time between the announcement date and completion date when financial regulation policy uncertainty levels are elevated.
|Thesis Advisor||Hoffmann, F.K.|
Wijk, J. van der. (2020, April 16). Financial Regulation Policy Uncertainty and Mergers and Acquisitions by European Banks. Business Economics. Retrieved from http://hdl.handle.net/2105/51813