Munich Personal RePEc Archive

Being a foreigner among domestic banks: Asset or liability?

Claessens, Stijn and van Horen, Neeltje (2009): Being a foreigner among domestic banks: Asset or liability?

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_13467.pdf

Download (153kB) | Preview

Abstract

When do foreign banks have an advantage operating abroad and when not? Studying the performance of foreign banks in a large number of countries between 1999 and 2006, we find that this crucially depends on a number of factors. Specifically, foreign banks tend to perform better compared to domestic banks when coming from a high income country, but worse when coming from a developing country. Foreign banks tend to outperform domestic banks when competitiveness in the host country is limited. And foreign banks from source countries geographical or cultural close to the host country perform better than distant foreign banks. These findings show that it is important to control for heterogeneity among foreign banks when studying their performance and help reconcile some contradictory results found in the literature.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.