Foreign Bank Entry and Credit Allocation in Emerging Markets

Sylwester Kozak (), Emilia Jurzyk, Hans Degryse and Olena Havrylchyk

No 2009/270, IMF Working Papers from International Monetary Fund

Abstract: We employ a unique data set containing bank-specific information to explore how foreign bank entry determines credit allocation in emerging markets. We investigate the impact of the mode of foreign entry (greenfield or takeover) on banks' portfolio allocation to borrowers with different degrees of informational transparency, as well as by maturities and currencies. The impact of foreign entry on credit allocation may stem from the superior performance of foreign entrants ("performance hypothesis"), or reflect borrower informational capture ("portfolio composition hypothesis"). Our results are broadly in line with the portfolio composition hypothesis, showing that borrower informational capture determines bank credit allocation.m

Keywords: WP; greenfield bank; takeover bank; foreign bank; lending rate; bank entry (search for similar items in EconPapers)
Pages: 43
Date: 2009-12-01
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Citations: View citations in EconPapers (29)

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Related works:
Working Paper: Foreign Bank Entry and Credit Allocation in Emerging Markets (2009)
Working Paper: Foreign Bank Entry and Credit Allocation in Emerging Markets (2009)
Working Paper: Foreign Bank Entry and Credit Allocation in Emerging Markets (2009)
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