Being a foreigner among domestic banks: Asset or liability?

Stijn Claessens () and Neeltje Van Horen ()

MPRA Paper from University Library of Munich, Germany

Abstract: When do foreign banks have an advantage operating abroad and when not? Studying the performance of foreign banks in a large number of countries between 1999 and 2006, we find that this crucially depends on a number of factors. Specifically, foreign banks tend to perform better compared to domestic banks when coming from a high income country, but worse when coming from a developing country. Foreign banks tend to outperform domestic banks when competitiveness in the host country is limited. And foreign banks from source countries geographical or cultural close to the host country perform better than distant foreign banks. These findings show that it is important to control for heterogeneity among foreign banks when studying their performance and help reconcile some contradictory results found in the literature.

Keywords: foreign direct investment; international banking; performance; distance (search for similar items in EconPapers)
JEL-codes: F21 F23 G21 (search for similar items in EconPapers)
Date: 2009-03
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/13467/1/MPRA_paper_13467.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/17982/1/MPRA_paper_17982.pdf revised version (application/pdf)

Related works:
Journal Article: Being a foreigner among domestic banks: Asset or liability? (2012)
Working Paper: Being a Foreigner Among Domestic Banks: Asset or Liability? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13467

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().