A helping hand: examining the effect of foreign banks on the business environment

2015 ◽  
Vol 10 (4) ◽  
pp. 875-895 ◽  
Author(s):  
Christopher A. Hartwell ◽  
Bryane Michael
Keyword(s):  
Emerging Markets ◽  
Emerging Market ◽  
Legal Protection ◽  
Financial Sector ◽  
Business Environment ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Content Type ◽  
Foreign Bank Entry ◽  
Bank Entry

Purpose – The penetration of foreign banks into emerging markets has been linked with financial sector deepening and expansion of credit. However, there is little research into the interaction of financial sector institutions with broader transition and development dynamics. The purpose of this paper is to examine if the presence of foreign financial institutions helped to shape a better business environment over the long-run in emerging markets. Design/methodology/approach – The authors use aggregate, country-level annual data for 107 developed and emerging market countries over a shifting 30-year time span (1983-2012). The authors use Prais-Winsten and System-GMM techniques on stationary variables to highlight linkages between foreign banks and the overall business environment. Where data were found to be non-stationary, the authors applied panel cointegration approaches, including Granger Causality and full-modified OLS, to research the same relationship. Findings – The results show that foreign bank entry in emerging markets has had a positive effect in the broader business environment, with the biggest effects on legal protection, competitiveness, and time to import/export. Research limitations/implications – This paper does not consider the broader effects of foreign bank entry on competition within emerging markets, an area that the authors are considering as fruitful for future research. Originality/value – The issue of financial sector impact on broader business environment issues has not been studied in the extant literature. Moreover, this study makes an important contribution for policymakers who are grappling with issues related to financial sector regulation in the post-global financial crisis world.

scholarly journals The effects of foreign banks entry in emerging market economies

2011 ◽  
Vol 1 (2) ◽  
Author(s):  
MSc. Florida Veljanoska
Keyword(s):  
Emerging Markets ◽  
Emerging Market ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Medium Size ◽  
Negative Consequences ◽  
Negative Effects ◽  
Foreign Bank Entry ◽  
The Impact ◽  
Bank Entry

This paper investigates the effects of foreign bank entry in emerging markets. We developed a picture of a multinational bank in an emerging markets by combining statistics from several sources, in order to explore broad range of effects that brings foreign bank entry in the developing countries. Some impacts of foreign bank entry have been thoroughly studied, while others are hardly mention. Entry of foreign bank brings large benefits to host country’s financial system and economies at large. This paper is studying those benefits very carefully, by analyzing the impact of foreign bank entry on economy, government, monetary policy, large enterprises, small and medium size enterprises, domestic bank etc. But, we also consider the fact that at the same time, foreign investment in the financial sector, rises some concerns, and therefore we analyze the negative effects as well. At the end we must admit that although there are some negative consequences from foreign bank entry in emerging markets, the benefits that arise from foreign banks penetration are much more, and this trend of foreign bank entry has brought new positive economic impulse in developing world.

scholarly journals Repressed banking industry: The context of emerging market

2020 ◽  
Vol 4 (1) ◽  
pp. 54-60
Author(s):  
Gardachew Worku Fekadu
Keyword(s):  
Financial Liberalization ◽  
Banking Industry ◽  
Emerging Market ◽  
Financial Sector ◽  
Qualitative Approach ◽  
Foreign Bank ◽  
Secondary Sources ◽  
Foreign Bank Entry ◽  
Sub Saharan ◽  
Bank Entry

The present paper uses a qualitative approach with data obtained from secondary sources on the sequence and timing of financial liberalization in Ethiopia. The approach is purely qualitative, which simply examines the sequence of financial sector liberalization measures introduced in Ethiopia between 1992 and 2014. The study aims to identify the financial sector liberalization measures introduced and critically evaluate the timing and sequence of these programs implemented in Ethiopia. In light of documented empirical findings, it was found that the financial liberalization programme in Ethiopia was not properly and timely sequenced, and as a result, the Ethiopian financial sector has remained underdeveloped when compared to sub-Saharan African standards and its neighbouring countries. The regulatory fences, especially the restriction of foreign bank entry, should be seriously reconsidered and such fences shall be soon uprooted and steps towards the establishment of the financial market should be taken.

scholarly journals Foreign Bank Entry and Credit Allocation in Emerging Markets

2009 ◽  
Author(s):  
Hans Degryse ◽  
Olena Havrylchyk ◽  
Emilia Magdalena Jurzyk ◽  
Sylwester J. Kozak
Keyword(s):  
Emerging Markets ◽  
Foreign Bank ◽  
Credit Allocation ◽  
Foreign Bank Entry ◽  
Bank Entry

scholarly journals Foreign Bank Entry in the Late Ottoman Empire: The Case of the Imperial Ottoman Bank

2015 ◽  
Vol 11 (3) ◽  
Author(s):  
Avni Önder Hanedar
Keyword(s):  
Ottoman Empire ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Bank Branches ◽  
Foreign Bank Entry ◽  
Using Data ◽  
Late Ottoman Empire ◽  
Late Ottoman ◽  
Over Time ◽  
Bank Entry

AbstractBefore 1900, there were few foreign banks in the Ottoman Empire. The most important foreign bank was the Imperial Ottoman Bank. Many rival foreign banks established a presence over time, which could have undermined the power of the Imperial Ottoman Bank due to greater competition. This article examines how rival foreign banks affected the Imperial Ottoman Bank branches, using data on profits of these branches between 1895 and 1914. Empirical findings do not indicate that rival bank branches were related to lower profits for Imperial Ottoman Bank branches in the respective markets.

scholarly journals Foreign bank entry impacted domestic-owned banks in Ghana from 1975 to 2008

2013 ◽  
Vol 2 (4) ◽  
pp. 40-53
Author(s):  
Nsiah Acheampong
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Return On Assets ◽  
Foreign Bank Entry ◽  
Domestic Banks ◽  
Bank Entry

This article empirically examines the effects of foreign bank entry on the financial performance of Merchant Bank Ghana Limited and Ghana Commercial Banks Limited in Ghana from 1975 to 2008. The main result of the pooled regression was that foreign bank entry relatively increased domestic banks’ return on assets for the period 1992-2008; a period with a high influx of foreign banks into Ghana. This result supported the studies by Beck, Demirguc-Kunt, and Levine (2006) and Boldrin and Levine (2009) that found that foreign bank entry enhanced domestic banks profitability margins. The presence of foreign-owned banks was not detrimental to the financial performance of the domestic-owned banks in Ghana.

scholarly journals Foreign Bank Entry and Credit Allocation in Emerging Markets

2009 ◽  
Vol 09 (270) ◽  
pp. 1 ◽  
Author(s):  
Sylwester Kozak ◽  
Emilia Magdalena Jurzyk ◽  
Hans Degryse ◽  
Olena Havrylchyk ◽  
◽  
...  
Keyword(s):  
Emerging Markets ◽  
Foreign Bank ◽  
Credit Allocation ◽  
Foreign Bank Entry ◽  
Bank Entry
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