The Real Effect of Foreign Banks
Valentina Bruno and
Review of Finance, 2014, vol. 18, issue 5, 1683-1716
Although foreign banks can act as catalysts for financial and economic development, their role remains controversial because they might displace local lending, thereby tightening firms’ overall access to credit. We study the economic channels through which domestic lending by foreign banks affects real economic activity in a large cross-section of developing and advanced countries. We find that foreign lending alleviates financial constraints and increases real growth net of the competitive reaction of local lenders. In addition to providing stable access to credit, foreign banks also mitigate the consequence of informational and legal obstacles to lending, especially in developing credit markets.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:revfin:v:18:y:2014:i:5:p:1683-1716.
Ordering information: This journal article can be ordered from
Access Statistics for this article
Review of Finance is currently edited by Alex Edmans
More articles in Review of Finance from European Finance Association Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().