Effects of Foreign Acquisitions on the Performance of Securities Firms: Evidence from Turkey

This paper analyzes the effects of foreign acquisitions on the performance of securities firms in Turkey by using Data Envelopment Analysis and panel regression. Emerging economies including Turkey have been attracting large amounts of foreign direct investments (FDI) to the financial services industry in recent years. Acquisition is a common way of FDI. However, evidence for the effects of acquisitions on the performance of financial firms is limited. Although a number of studies have been done for banking industry, securities firms are largely ignored. This study aims to fill this gap in the literature by bringing evidence from Turkey. Our results show that foreign acquisition has positive significant contribution to the efficiency of securities firms. This positive effect is significant two years after the acquisitions and becomes stronger in the later years.