Does Foreign Bank Entry Contribute to Financial Depth?: Examining The Role of Income Thresholds

Sasidaran Gopalan

No 2015-05, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: This paper examines the relationship between foreign bank entry and financial depth for 57 emerging and developing economies (EMDEs) over 1995-2009. Using various measures of financial depth, the paper also explores the degree to which the relationship between foreign bank entry and financial sector deepening varies by different income thresholds of EMDEs. The empirical findings suggest that while foreign banks positively further financial depth, the marginal effects of foreign bank entry diminish over time with greater levels of economic development. That is, the impact of foreign bank entry tends to become smaller as the per-capita income of the country rises.

Keywords: foreign bank entry; financial depth; financial development; income thresholds (search for similar items in EconPapers)
JEL-codes: F21 G00 G21 O16 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-02, Revised 2015-02
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hku:wpaper:201505

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