How does banking sector globalization affect economic growth?
International Review of Economics & Finance, 2017, vol. 48, issue C, 83-97
The present study examines the impact of banking sector globalization on economic growth for a panel of 138 nations spanning 1995–2013. Employing different econometric models, the study finds greater banking sector openness to reduce economic growth. Such finding holds in both emerging markets and low income countries, and in nations with more than 10 percent foreign banks, but not in advanced economies. The paper also finds foreign banks reduce private credit flows in host nations. This implies foreign banks face informational bottlenecks that hinder them from lending to a large majority of potential client-base in host markets.
Keywords: Foreign bank presence; Economic growth; Economic development; Panel data models; Bayesian analysis (search for similar items in EconPapers)
JEL-codes: G21 O16 O40 E44 F43 C23 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:48:y:2017:i:c:p:83-97
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