Credit Risk–Bank Value Relationship: Examining M&A’s Moderating Effect
Abstract
This study investigates the moderating effect of mergers and acquisitions (M&A) on the relationship between credit risk and bank value. Using moderation analysis, robust panel regressions, and an objective credit risk metric, it addresses limitations of prior research that relied on event study methods prone to bias or discretionary risk metrics, offering a comprehensive framework for analyzing credit risk and value creation in the context of M&A in the banking industry. The findings reveal a significant negative association between credit risk and bank value, a direct positive effect of M&A on value, and a moderating effect whereby M&A exacerbates the adverse impact of credit risk. These results provide actionable insights for investors, practitioners, and policymakers, who should be especially mindful of credit risks in M&A contexts.
Fields of Study & Subjects
Corporate Finance and Governance
Banking stability
regulation
efficiency
Financial Distress and Bankruptcy Prediction
Publication details
- Journal / source
- Journal of risk and financial management
- Publisher
- MDPI AG
- Volume
- 19
- Issue
- 1
- Pages
- 22–22
- Publication date
- 1 January 2026
- Language
- EN