Journal of Economics and Business 56 (2004) 377–404 Bank acquisitions and performance: evidence from a panel of European credit entities Belén D´ ıaz D´ ıaz ∗ , Myriam Garc´ ıa Olalla, Sergio Sanﬁlippo Azofra Departamento de Administración de Empresas, Universidad de Cantabria, Avda. de los Castros s/n, Santander 39005, Spain Received 29 May 2002; received in revised form 8 January 2004; accepted 13 February 2004 Abstract The aim of our research is to study the effect on European Union credit entities performance of ﬁnancial acquisitions, overcoming three limitations found in previous studies: most studies have focused on the United States market (characterised by higher regulatory restrictions for banking expansion both geographically and in products); they have not considered acquisitions of other banks as distinct from acquisitions of other non-banking ﬁnancial entities; and statistical limitations have been evidenced. Our study, therefore, is the ﬁrst to analyse bank performance derived from both the acquisition of another bank and the acquisition of other non-banking ﬁnancial entities, using panel data methodology, for the period 1993–2000, in a sample of 1629 banks, where 181 acquisitions are noted. The results show an increase in the acquirers’ long-term proﬁtability. The increase in performance, however, is more signiﬁcant for bank acquisitions than for non-bank acquisitions. © 2004 Elsevier Inc. All rights reserved. JEL classiﬁcation: G34; G21 Keywords: Banking concentration; Long-term performance; Panel data 1. Introduction and motivation Over the last few decades, the ﬁnancial sector has undergone substantial changes. The de- velopment of assets markets, desintermediation, deregulation, ﬁnancial innovation and the ∗ Corresponding author. Tel.: +34 942201660; fax: +34 942201890. E-mail addresses: diazb@unican.es (B.D. D´ ıaz), garciam@unican.es (M.G. Olalla), sanﬁlis@unican.es (S.S. Azofra). 0148-6195/$ – see front matter © 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.jeconbus.2004.02.001