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...nd their means by theirsrespective standard deviations.sAs such the regression results depict the relative contribution of the explanatorysvariables to variations in the dependent variable (see, e.g. =-=Gujarati, 2005-=-)sdata.sSince the excess returns are estimated values, the use of weighted least squares (withsthe inverse of the standard deviation as the weighting scheme) is preferred to OLS (Campasand Hernando, 2...

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...tle by way of consensus on the length of the event window andsthe judgement is often based on data availability and sampling considerations.sSome studiesshave adopted short event windows of 1-5 days (=-=Andrade et al., 2001-=-; Mulherin and Boone,s2000; Campa and Hernando, 2004, 2006).sOthers consider a longer window which takes intosconsideration possible bid revisions and competitions (Conn et al, 2005), thus ensuring th...

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... thesUS studies analysing bank mergers find that targets generally gain at the expense of thesacquirers, while the combined entities experience insignificant wealth changes (Hawawinisand Swary, 1990; =-=Houston and Ryngaert, 1994-=-; Kane, 2000).sSome studies, however, findsthat announcement of bank M&As neither creates nor destroys shareholder value (Hannansand Wolken, 1989; Pilloff and Santomero, 1998), while others find that ...

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... wesassociate this result to possible pre-existing conditions in the host market, suggestingsdifficulties that acquiring banks face in turning around the fortunes of acquired banks (Peekset al, 1999; =-=Berger et al, 2000-=-).sThus potential downside risks are judged by marketsparticipants to outweigh the potential benefits from cross-border M&As in the EU retailsbanking market.sOne of the downside risks, consistent with...

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... acquirers in bank mergers and acquisitions (M&As) that occurred in the EuropeansUnion (EU) over the period 1997-2007.sIn line with previous studies for EU banks (e.g.sTourani-Rad and Van Beek, 1999; =-=Cybo-Ottone and Murgia, 2000-=-), we distinguish betweensdomestic and cross-border M&As, but focus principally on acquirers associated with largescommercial bank transactions with values over £1bn.sOur analysis reflects a period of...

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...nk mergers find that targets generally gain at the expense of thesacquirers, while the combined entities experience insignificant wealth changes (Hawawinisand Swary, 1990; Houston and Ryngaert, 1994; =-=Kane, 2000-=-).sSome studies, however, findsthat announcement of bank M&As neither creates nor destroys shareholder value (Hannansand Wolken, 1989; Pilloff and Santomero, 1998), while others find that announcement...

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... banking groups in the EU responded to deregulatory measures by involvingsmainly in domestic M&As trying to consolidate their positions within national borders to facesa more competitive environment (=-=Campa and Hernando, 2006-=-).sReducing further legal andsregulatory barriers to cross-border banking consolidation has therefore been one of the policyspriorities of the European Commission (2005) towards development of the sin...

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...nt window andsthe judgement is often based on data availability and sampling considerations.sSome studiesshave adopted short event windows of 1-5 days (Andrade et al., 2001; Mulherin and Boone,s2000; =-=Campa and Hernando, 2004-=-, 2006).sOthers consider a longer window which takes intosconsideration possible bid revisions and competitions (Conn et al, 2005), thus ensuring thatsleakage of information (rumour and news) and the ...

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...rest revenue.sBanks may be influenced in M&As forsregulatory reasons or as a means to transfer risk which may therefore influence investmentsreturns (Amihud et al, 2002; Valkanov and Kleimeier, 2006; =-=Buch and DeLong, 2008-=-).sFurthermore, given the differences observed in the dividend payout between domestic andscross-border acquirers, we also investigate its possible impact on value creation at the time ofsannouncement...

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...s of 1-5 days (Andrade et al., 2001; Mulherin and Boone,s2000; Campa and Hernando, 2004, 2006).sOthers consider a longer window which takes intosconsideration possible bid revisions and competitions (=-=Conn et al, 2005-=-), thus ensuring thatsleakage of information (rumour and news) and the reaction of the market that may influencesthe abnormal returns are captured.sA handful of bank M&A studies have used long eventsw...

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...consider at the time of announcement, where as the impact of dividendspolicy is found to be significant in affecting accounting based measures of long run stocksreturn performance of US bank mergers (=-=Olson and Pagano, 2005-=-).s5. ConclusionsThis paper has analysed the difference between the announcement period acquirer returnssfrom cross-border and domestic bank M&As in the European Union.sThe study has focuseds4sGeneral...

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...erent degree of event impact. This is done bysweighing the abnormal returns by the standard deviation. The purpose of the standardizationsis to ensure that each abnormal return has the same variance (=-=Serra, 2002-=-).sThus, by dividingseach firm’s abnormal residual by the standard deviation over the estimation period, eachsresidual has an estimated variance of 1 and thus defined by the equation:s=swhere: SARjt =...

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... risk captured bysloan loss provisions to net interest revenue.sBanks may be influenced in M&As forsregulatory reasons or as a means to transfer risk which may therefore influence investmentsreturns (=-=Amihud et al, 2002-=-; Valkanov and Kleimeier, 2006; Buch and DeLong, 2008).sFurthermore, given the differences observed in the dividend payout between domestic andscross-border acquirers, we also investigate its possible...