The impact of interstate banking legislation on target and buyer bank stock returns
Article Abstract:
Market reaction to the easing of state legislation on interstate banking is both positive and significant for affected bank stocks, whether buyer or acquisition target banks. Almost every state in the country has enacted some form of interstate banking legislation which allows out-of-state banks to acquire local banks. An examination of the impact of interstate banking laws on potential bidder and target banks shows that a substantial 5% increase is sustained by the buyer group during the event window, while the target group posts an increase of more than 7%.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1996
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Evidence of market overreaction to state antitakeover legislation
Article Abstract:
The impact of state antitakeover laws on the market value of companies is analyzed. Results show that the initial decline in the market value of firms is eventually offset by postive counter-reactions. These findings indicate the market's strong initial reactions to state antitakeover laws. Hypotheses on the reasons for market value recovery include reversals caused by extreme price movements and price-setting by investors.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1995
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