Motives and Non-Economic Reasons for Bank Mergers and Acquisitions
The Icfai University Journal of Bank Management, Vol. 8, No. 1, pp. 7-30, February 2009
22 Pages Posted: 19 Nov 2006 Last revised: 9 Mar 2009
Date Written: October 1, 2006
The aim of our research was to identify non-economic reasons for bank mergers and substantiate their influence compared to economic reasons. We expand the current economic literature, which acknowledges the existence of personal motives and managerial self-interest, but mostly fails to proof their importance, by applying methods from psychological research. Personality inventories, interviews, and scenarios are used to investigate the relationship between selected motives (power, achievement, sensation seeking, and prestige) and decision-making behavior for 20 German bank managers and 40 subjects of a control group. A multiple regression analysis demonstrates the predictability of behavior according to the prominence of the four motives. Furthermore, the results support the conclusion that managers tend to accept great economic disadvantages in following their own motives.
Keywords: Financial institutions, bank management, Mergers & Acquisitions, motives, managerial self-interest
JEL Classification: G21, G34, M59
Suggested Citation: Suggested Citation