EconPapers    
Economics at your fingertips  
 

Inherited or earned? Performance of foreign banks in Central and Eastern Europe

Olena Havrylchyk and Emilia Jurzyk

Journal of Banking & Finance, 2011, vol. 35, issue 5, 1291-1302

Abstract: In this study, using a combination of propensity score matching and difference-in-difference techniques, we investigate the impact of foreign bank ownership on the performance and market power of acquired banks operating in Central and Eastern Europe. This approach allows us to control for a selection bias as larger but less profitable banks were more likely to be acquired by foreign investors. We show that during 3Â years after takeover, banks become more profitable owing to cost minimization and better risk management. They also gained market share due to passing their lower cost of funds to borrowers in terms of lower lending rates. Previous studies failed to note the improvements in the performance of takeover banks because they did not account for the selection bias.

Keywords: Foreign; banks; Foreign; acquisition; Propensity; score; matching (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378-4266(10)00388-2
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Inherited or earned? Performance of foreign banks in Central and Eastern Europe (2011)
Working Paper: Inherited or earned? Performance of foreign banks in Central and Eastern Europe (2011)
Working Paper: Inherited or Earned? Performance of Foreign Banks in Central and Eastern Europe (2010) Downloads
Working Paper: Inherited or Earned? Performance of Foreign Banks in Central and Eastern Europe (2008) Downloads
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:eee:jbfina:v:35:y:2011:i:5:p:1291-1302

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-04-17
Handle: RePEc:eee:jbfina:v:35:y:2011:i:5:p:1291-1302