 Impact of foreign entry into the banking sector: The case of Thailand in 1999–2014Wanxue Lu and Fumiharu Mieno Pacific-Basin Finance Journal, 2020, vol. 64, issue C Abstract: This paper examines the impact of foreign capital entry on the cost and profit structure of commercial banks in Thailand using bank-level panel data for the period 1999–2014. We distinguish between market-level and individual bank-level impacts. First, we found that market-level foreign capital presence resulted in increases in interest rate spread and non-interest income, and reductions in operating expenses, resulting in higher returns on assets. Second, the increase in bank-level foreign ownership share in domestic banks resulted in a rise in interest rate spread and lower default risk, but at the same time, an increase in operating expenses. Finally, the acquisition of local banks by foreign banks resulted in only a moderate increase in interest income, and the profit structure of these banks remained vulnerable due to their small size. Thus, foreign entry into the Thai banking sector at the beginning of the 21st century has had multi-faceted effects. Keywords: Commercial bank; Foreign entry; Financial regulation; Thailand (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:64:y:2020:i:c:s0927538x20300998 DOI: 10.1016/j.pacfin.2020.101424 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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