Research On The Impact Of Cross-Border M&A On The Efficiency Of Commercial Banks In China

Since the 1990 s,banks have been merged with each other in the international financial market to form the huge and competitive financial institutions which provide services for the global financial market have been more and more intensified.There are many banks have achieved its internationalization goals through M&A.The cross-border M&A process of Chinese commercial banks was started by the M&A between the bank of China and Macao Dafeng bank in 1984,and then entered the era of all-round development in 2006.In recent years,with the acceleration of opening-up of China’s capital market,the marketization of interest rates,the internationalization of the RMB and the gradually deepening of Chinese enterprises "going out" strategy and "The Belt and Road" strategy to speed up the pace of the internationalization of Chinese commercial banks which have been developed a series of cross-border M&A activities.By the end of 2017,there were 33 cross-border M&A cases which developed by eight commercial banks in China.As a financial enterprise,all the autonomous behaviors of commercial banks are based on improving efficiency and maximizing profits.Then,what effect does the transnational merger and acquisition of commercial banks have on the efficiency of the bank in the end,whether the efficiency of the bank is improved or the efficiency is reduced.This paper first describes the background and significance of China’s commercial banks’ cross-border M&A.By combing the literature at home and abroad,it summarizes the motivation,risk theory and empirical evaluation method of efficiency.Then,based on the theory of cross-border M&A of commercial banks to review the historical process of cross-border M&A in China’s commercial banks,and then analyze Chinese commercial banks’ cross-border M&A motivation,specific risks and opportunities which combined with the present domestic and international environment.In the empirical research,we use Malmquist index to analyze the changeof bank efficiency after cross-border M&A,and then establish panel model to make quantitative analyze about the impact of cross-border M&A on China’s commercial banks,finally analyze the relationship between cross-border M&A experience and bank efficiency.Accordingly,get the following results:(1)Malmquist index analysis shows that Chinese state-owned Banks’ technical efficiency’ growth rate which after the cross-border M&A is decreasing from two to three years,Although it has recovered,it has not yet reached the level of pre merger.Only the Mingsheng bank’s efficiency growth rate decreased at the first year in Chinese non-state-owned banks.And there is no obvious change in other non-state-owned banks’ efficiency growth rate.The results show that cross-border m&a have a greater negative impact on the efficiency of state-owned commercial banks in China.Although they did not have a significant negative effect on the efficiency of China’s non-state-owned commercial banks,they also failed to bring the improvement of efficiency.By studying the scale efficiency,pure technical efficiency change and technical progress,we found the reasons about the efficiency growth of state-owned commercial banks is lower than the non state-owned banks after the cross-border M&A are the high frequency of cross-border M&A,small time interval,the large size and poor ability of integration about all resources.(2)Through the quantitative study on the model of the panel found the occurrence of cross-border M&A and the nature of state-owned are significantly negatively correlated with the overall efficiency of the sample banks.The occurrence of cross-border M&A did not bring the improvement of the overall efficiency of the sample banks and reduce the efficiency of banks.The nature of state-owned shares had a negative impact on the efficiency of banks.The results of this study are in agreement with the results of the Malmquist index,which indicates that the conclusions of this study have high accuracy.In addition,there is a U relationship between the experience of cross-border M&A and the efficiency of the banks.When the number of cross-border M&A of commercial banks cases is more than 9.643,which means when banks take about 9 cross-border mergers and acquisitions cases,the occurrence of cross-border M&A will increase the efficiency of banks.When the number of cross-border M&A cases is less than 9,the occurrence of cross-border M&A will reduce the efficiency of banks.Finally,based on the researchfindings,this paper gives some suggestions: developing equitable cross-border M&A strategy,focusing on merger integration,absorbing successful experience in crossborder M&A and training professional talents and institutions.