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The Performance of Merging Cooperative Banks in Germany

Dennis Dreusch & Peter Reichling

German Economic Review2025https://doi.org/10.1515/ger-2024-0087article
AJG 2ABDC B
Weight
0.37

Abstract

Motivated by the recent increase in bank mergers, this paper examines the performance of German cooperative banks that merged between 2014 and 2019. We are particularly interested in whether elevated merger rates are due to bank inefficiencies or to challenging policy measures such as low-for-long interest rates. The results indicate that banks that perform relatively worse before and during the low interest environment exhibit a greater probability of becoming a target during this period. Consolidation generally occurs among low performing banks where large and well-capitalized banks merge with their small and inefficient peers. Ultimately, our results attribute the increased number of mergers to inefficiencies in the banking industry, as banks that exited the market were inefficient prior to the adverse low interest rate environment.

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https://doi.org/https://doi.org/10.1515/ger-2024-0087

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@article{dennis2025,
  title        = {{The Performance of Merging Cooperative Banks in Germany}},
  author       = {Dennis Dreusch & Peter Reichling},
  journal      = {German Economic Review},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1515/ger-2024-0087},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.