The impact of GDP on M&A volume in the European area in the context of the consolidation of the banking market

Abstract

The banking sector of any nation is its key driver because the performance of the financial sector plays a vital role in the development of any economy. The European banking sector has gone through a process of rapid changes during the past three decades. The established trend of liberalization and deregulation resulted in a wave of massive consolidation, which fundamentally changed the environment in which banks did business. The main purpose of this paper is to evaluate relationships and, above all, quantify the impact of GDP on the volume of cross-border mergers and acquisitions in the banking sector for the period 2004 – 2021 in selected countries of the European Area by applying three panel regression methods. From the values shown, it follows that the percentage growth of GDP has a significant effect on the percentage growth of the volume of cross-border mergers and acquisitions in the banking sector and thus was the established hypothesis confirmed. The results confirmed that 1% growth in the economy will cause a 32% increase in the volume of cross-border mergers and acquisitions in the European Area.