Does foreign bank penetration affect the risk of domestic banks? Evidence from emerging economies

Bang Jeon, Ji Wu, Minghua Chen and Rui Wang ()
Additional contact information
Rui Wang: Southwestern University of Finance and Economics, Postal: Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu, China,

No 2016-14, School of Economics Working Paper Series from LeBow College of Business, Drexel University

Abstract: We investigate whether foreign bank penetration affects the risk-taking of domestic banks in emerging economies. By using bank-level data from 35 markets during the period of 2000-2014, we find significant evidence that the riskiness of domestic banks increases with the presence of foreign banks, and this finding is shown to be consistent in a series of robustness examinations. We also explore various conditions for the heterogeneity of the nexus between foreign bank penetration and domestic banks’ risk-taking, including: (1) what types of domestic banks are affected more by the presence of foreign banks, and (2) what patterns of foreign penetration exert more pronounced impact.

Keywords: Foreign bank penetration; bank risk-taking; emerging economies (search for similar items in EconPapers)
JEL-codes: E44 F36 G15 G21 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2016-09-01
New Economics Papers: this item is included in nep-ban and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://drive.google.com/file/d/0BxRDnd8cEKndZkw2Z ... sRGq8GAYnGH-DpVD1RDQ Full text (application/pdf)

Related works:
Journal Article: Does foreign bank penetration affect the risk of domestic banks? Evidence from emerging economies (2017)
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:ris:drxlwp:2016_014

Access Statistics for this paper

More papers in School of Economics Working Paper Series from LeBow College of Business, Drexel University Contact information at EDIRC.
Bibliographic data for series maintained by Richard C. Barnett ().