Corporate Governance and Mergers and Acquisitions Performance in Banks: Evidence under the Special Regulatory Environment in Taiwan |
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Authors: | Chien-Chi Chu Ying-Maw Teng Hsiu-Ling Lee |
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Institution: | 1. Department of Finance, Shantou University Business School, Shantou Guangdong, China;2. Department of International Business, I-Shou University, Kaohsiung City, Taiwan (R.O.C.);3. Department of Accounting, I-Shou University Kaohsiung City, Taiwan (R.O.C.) |
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Abstract: | In this study, we focus on the relation between bank governance and bank merger results under Taiwan’s special regulatory environment in 2000. Adopting governance variables (executive remuneration, managerial ownership, and board diversity), we find that managerial ownership is positively related to bank merger results and that board size is negatively correlated with bank mergers’ performance. This study supports sound governance mechanisms to prevent banks from pursuing a value-loss merger and acquisition (M&A). Our results offer the insight that internal bank governance structures have a bigger impact on the value effects from bank mergers. Thus, regulators may elevate the performance of bank M&As by enhancing corporate governance codes. |
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Keywords: | board diversity corporate governance executive remuneration M& A performance managerial ownership |
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