Dancing the Viennese waltz or just doing business? The policy of parent banks in CESEE countries

Małgorzata Iwanicz-Drozdowska and Bartosz Witkowski

Post-Communist Economies, 2020, vol. 32, issue 6, 726-748

Abstract: We investigate how group- and market-specific traits impact the credit policy of foreign-owned banks operating in Central, Eastern and South-Eastern European (CESEE) countries over the 1995–2015 period using an instrumental variable fixed effects approach. This period includes the years of the global financial crisis (GFC), during which the Vienna Initiative (VI) was established to limit the negative impact of the crisis on five CESEE countries in which foreign-owned banks play a considerable role. We find evidence that the credit policy of banks operating in VI countries and/or owned by VI parents differs from the overall policy in the region. Our study suggests that parent banks focus on the geographical diversification of group assets on host markets, followed by ensuring that there is strict capital control and that return on equity outperforms that of the market. Our results confirm that the VI was efficient in immunising subsidiaries and countries.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/14631377.2020.1745561 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:pocoec:v:32:y:2020:i:6:p:726-748

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CPCE20

DOI: 10.1080/14631377.2020.1745561

Access Statistics for this article

Post-Communist Economies is currently edited by Roger Clarke

More articles in Post-Communist Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().