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Foreign Bank Presence, Domestic Bank Performance and Financial Development

Foreign Bank Presence, Domestic Bank Performance and Financial Development This article analyses the relationship between foreign bank presence and the performance of the domestic banking sector and takes into account the role of the level of development of the financial sector of the recipient country. We use data of 982 banks in 48 countries for 1990-96. We find support for the hypothesis that financial development does matter. In particular, we show that foreign bank presence is associated with higher costs and margins of domestic banks at low levels of financial development while it is associated with falling costs and margins of domestic banks at higher levels of financial development. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Emerging Market Finance SAGE

Foreign Bank Presence, Domestic Bank Performance and Financial Development

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References (22)

Publisher
SAGE
Copyright
Copyright © by SAGE Publications
ISSN
0972-6527
eISSN
0973-0710
DOI
10.1177/097265270400300206
Publisher site
See Article on Publisher Site

Abstract

This article analyses the relationship between foreign bank presence and the performance of the domestic banking sector and takes into account the role of the level of development of the financial sector of the recipient country. We use data of 982 banks in 48 countries for 1990-96. We find support for the hypothesis that financial development does matter. In particular, we show that foreign bank presence is associated with higher costs and margins of domestic banks at low levels of financial development while it is associated with falling costs and margins of domestic banks at higher levels of financial development.

Journal

Journal of Emerging Market FinanceSAGE

Published: Aug 1, 2004

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