Journal of Financial Stability Vol. 76 2025
The impact of policy uncertainty on shareholder wealth: Evidence from bank M&A
Abstract
We investigate the impact of policy uncertainty (PU) on the economic impact of bank mergers and acquisitions (M&A). Using a sample of 3142 deals announced by US banks between 1986 and 2020, we find a significant positive effect of PU on acquirer short- and long-term market value. PU also positively affects acquirer post-merger accounting performance and increases the incentives for synergy-driven bank M&A. Amid PU, acquirers avoid stock-only financed deals, delay deal completion, and pay higher bid premiums. Our results are robust to model specifications that control for different proxies of PU, endogeneity, asset pricing models, and event windows surrounding deal announcements.
- DOI
- 10.1016/j.jfs.2024.101361
- Volume
- 76
- Pages
- 101361
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib