Financial Liberalization and Foreign Bank Entry in Emerging and Developing Economies: What Does the Literature Tell Us?

2015 ◽  
Vol 06 (02) ◽  
pp. 1550007 ◽  
Author(s):  
Sasidaran Gopalan
Keyword(s):  
Financial Liberalization ◽  
Developing Economies ◽  
Emerging Market ◽  
Foreign Bank ◽  
Banking Systems ◽  
Foreign Bank Entry ◽  
The Relationship ◽  
Bank Entry

An important feature of international financial liberalization in several emerging market and developing economies (EMDEs) over the last two decades has been the rising foreign bank participation in their domestic banking systems. While the term financial liberalization has been widely used in literature, it is often not carefully defined. What is the relationship between foreign bank entry and financial liberalization? This paper lays out a simple framework to understand the different components of financial liberalization, its relationship with domestic deregulation as well as foreign bank entry and also surveys the trends and implications of foreign bank entry in EMDEs.

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.

Financial Liberalization and Foreign Bank Entry on the Domestic Banking Performance in MENA Countries

2012 ◽  
Vol 24 (3) ◽  
pp. 195-207 ◽  
Author(s):  
M. Kabir Hassan ◽  
Benito Sanchez ◽  
Geoffrey M. Ngene ◽  
Ali Ashraf
Keyword(s):  
Financial Liberalization ◽  
Foreign Bank ◽  
Mena Countries ◽  
Foreign Bank Entry ◽  
Bank Entry

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.

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.

The Effects of Foreign Bank Entry on the Productivity of Chinese Banks

2017 ◽  
Vol 35 (3) ◽  
pp. 23-42
Author(s):  
Ran Cheng ◽  
Chao Wu ◽  
Keun-Yeob Oh
Keyword(s):  
Foreign Bank ◽  
Foreign Bank Entry ◽  
Chinese Banks ◽  
Bank Entry
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