Is foreign-bank efficiency in financial centers driven by homecountry characteristics?

Claudia Curi (), Paolo Guarda, Ana Lozano-Vivas and Valentin Zelenyuk

No 68, BCL working papers from Central Bank of Luxembourg

Abstract: This paper investigates the effects of home country banking regulations on the performance of foreign banks in Luxembourg?s financial center. We control for the main regulatory indicators, such as capital requirements, private monitoring, official disciplinary power and restrictions on bank activities, accounting for the regulatory regime applied to foreign banks. We also control for the level of GDP in the home country and its position in the business cycle. The two-stage bootstrap method proposed by Simar and Wilson (2007) is applied to bank panel data covering 1999-2009. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into the choice between establishing a branch or a subsidiary, when developing cross-border activities through financial centers.

Keywords: Foreign bank efficiency; Home-host country characteristics; Bank regulation; Data Envelopment Analysis; Bootstrap (search for similar items in EconPapers)
JEL-codes: C14 G15 G21 G28 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-10
New Economics Papers: this item is included in nep-ban, nep-eff, nep-ifn and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Is foreign-bank efficiency in financial centers driven by home or host country characteristics? Journal of Productivity Analysis, 2013, 40(3): 367-385.

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Related works:
Working Paper: Is foreign-bank efficiency in financial centers driven by home-country characteristics? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bcl:bclwop:bclwp068

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