EconPapers    
Economics at your fingertips  
 

Cross-Border Banking, Bank Market Structures and Market Power: Theory and Cross-Country Evidence

Franziska Bremus

No 1344, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Patterns in cross-border banking have changed since the global financial crisis. This may affect domestic bank market structures and macroeconomic stability in the longer term. In this study, I theoretically and empirically analyze how different modes of cross-border banking impact bank concentration. I use a two- country general equilibrium model with heterogeneous banks developed by De Blas and Russ (2010) to grasp the effect of cross-border lending and foreign direct investment in the banking sector on bank market structures. The model suggests that both cross-border lending and bank FDI mitigate concentration. Empirical evidence from a linked micro-macro panel dataset of 18 OECD countries supports the theoretical predictions: higher volumes of bank FDI and of cross-border lending coincide with lower Herfindahl-indexes in bank credit markets.

Keywords: Cross-border lending; bank foreign direct investment; bank market concentration; net interest margins (search for similar items in EconPapers)
JEL-codes: E44 F41 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-int and nep-mac
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Downloads: (external link)
http://www.diw.de/documents/publikationen/73/diw_01.c.433715.de/dp1344.pdf (application/pdf)

Related works:
Journal Article: Cross-border banking, bank market structures and market power: Theory and cross-country evidence (2015) 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:diw:diwwpp:dp1344

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().

 
Page updated 2019-05-19
Handle: RePEc:diw:diwwpp:dp1344