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Deals With Employees, Administrative Systems And Organisational Procedures. ...

Deals with employees, administrative systems and organisational procedures.
It assesses firm performance by using both financial and non-financial variables. If a qualitative approach. They point out that the problem with quantitative financial data is that it is backward looking and hence doesn't give a true representation of management's aims and goals going forward.

The paper by (Souder & Chakrabarti, 1984). The executives in the study rated and ranked their firms' motives for acquisitions, their firms' performances and the acquired firms performance. Performance was measured on six dimensions:
rate of growth of sales
rate of growth of profit
return on investment
growth or maintenance of market share
technological innovation
broadening of the customer base
Executives rated the importance of six benefits:
from shared technology
access to other party's marketing organisation
corporation's brand name
assess to capital
access to new markets, clients or customers
new management system

(Focarelli, Panetta & Salleo, 2002)
Event Study Methodology. Comparing the market value of the bidder and target before and after the announcement of the merger. The event-test literature for US data reaches the conclusion that US bank mergers add no value (Houston & Ryangaert 1994; Rhoades, 1994) but for European banks (Cybo-Ottone & Murgia, 2000) find positive affects of bank merger announcements between domestic banks and insurance companies. No improvement in operating income (Linder and Crane, 1993) no evidence of cost efficiency, no increase in ROE or returns on assets.
Possible explanation AGAIN is the agency problem.
Balance-sheet-based indicators or stochastic frontier methodologies are used to compare the performance of merging banks with that of a control group (For a discussion of the relative merits of the two see Pilloff and Santomero (1998).
The econometric set-up is a multinominal logit regression rather than standard binomial logit regression.
The paper by (Banning, 1999), focuses on how acquisition strategy might differ based on the bank's ownership structure?
Can we learn anything from the variation in corporate strategy among the banks.?
(Allen & Cebenoyan, 1991) based on bank ownership structures they found that banks that featured low shareholder concentration engaged in more merger activity and vice versa. They may engage in increasing firm size that may provide no gains to shareholders.
In banking managers must obtain regulatory approval for any acquisition. Given the already high concentration of UK retail banks which are often referred to as the ‘Big 5' they may be barred from making domestic acquisitions. Managers who intend to grow their assets may be drawn to acquisitions outside the firm's principal geographic location (Houston & Ryngaert, 1994; Liang & Rhoades, 1998) in that they provide a larger number of acquisition targets.

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