As part of my personal quest in trying to understand where our economy is going as we head into 2013 and beyond, I dig into the sites of government and related entities. When doing this, I sometimes find some really interesting information that may not be directly related to my economic research objective, but with my background in providing services to the Financial Services industry is of value at another level. Here are a couple of my recent finds from the site for The Board of Governors of the Federal Reserve System:
CEO Successions and Firm Performance in the US Financial Industry
A Paper by Antonio Falato and Dalida Kadyrzhanova
Abstract: “This paper examines the labor market for CEOs in the financial sector from 1988 to 2007, using a new hand-collected sample of 1,655 CEO successions. We document that there is a significant role of outside successions, as about one out of two successions involves an outside hire. In addition, using difference-in-differences estimates, we study the link between the labor market for finance CEOs and firm performance. We document that (1) there is a large performance gap between inside and outside successions, as outside successions are followed by significantly larger improvements in firm performance; (2) the performance gap between outside and inside successions is larger for firms with an insider dominated board of directors; (3) the performance gap widened after an important deregulation event (the 1999 Gramm-Leach-Bliley Act). These results are robust to using a battery of firm performance measures (short-run and long-run stock market returns, and several long-run operating performance measures) and a matched sample approach to address selection issues. Overall, our findings suggest that managerial human capital is very valuable in the financial industry, and weak internal governance hurts firm performance by limiting the scope of labor market competition”.
Consolidation and Merger Activity in the United States Banking Industry from 2000 through 2010
Research paper by Robert M. Adams
Abstract: “This study investigates trends in consolidation and merger activity in the United States banking industry from 2000 through 2010. Over this period, the U.S. banking industry has consistently experienced over 150 mergers annually, with the largest banking organizations holding an increasing share of banking assets. While the industry has undergone considerable consolidation at the national level, local banking markets have not experienced significant increases in concentration. The dynamics of consolidation raise concerns about competition, output, efficiency, and financial stability. This study uses a comprehensive proprietary data set to examine mergers and acquisitions involving banks and thrifts. The methodology in this paper expands the definition of mergers to include more types of transactions than previous studies on bank mergers.”
Let me know if you have any feedback on these research papers.
Take Care and Hey………………..Have a Great Day !!!!!!