Entry of Foreign Banks and their Impact on Host Countries

Maria Lehner and Monika Schnitzer ()

No 5954, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Foreign bank entry is frequently associated with spillover effects for local banks and increasing competition in the local banking market. We study the impact of these effects on host countries. In particular, we ask how these effects interact and how they depend on the competitive environment of the host banking market. An increasing number of banks is more likely to have positive welfare effects the more competitive the market environment, whereas spillovers are less likely to have positive welfare effects the stronger competition. Hence, competitive effects seem to reinforce each other, while spillovers and competition tend to weaken each other.

Keywords: competition in banking; foreign bank entry; multinational bank; spillovers (search for similar items in EconPapers)
JEL-codes: F37 G21 L13 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba and nep-com
Date: 2006-11
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Related works:
Working Paper: Entry of Foreign Banks and their Impact on Host Countries (2006)
Working Paper: Entry of Foreign Banks and their Impact on Host Countries (2006)
Working Paper: Entry of Foreign Banks and their Impact on Host Countries (2006)
Journal Article: Entry of foreign banks and their impact on host countries (2008)
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