EFFECTS OF FOREIGN BANKS ENTRY ON BANK PERFORMANCE IN THE CEE COUNTRIES

Janek Uiboupin

No 33, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: The purpose of this paper is to estimate empirically the short-term effects of foreign banks entry on bank performance in the Central and Eastern European (CEE) Countries. A sample of 219 banks from ten CEE countries (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia, Slovakia) is used in the analysis. The research results show that foreign banks entry affects negatively domestic banks’ revenues from interest-earning assets, non-interest income, and profitability. Foreign banks entry can also raise the overhead costs of the local banks in short term. The general conclusion is that foreign banks entry is likely to increase competition in the host country.

Pages: 44 pages
Date: 2004
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:33

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