Foreign banks in poor countries : theory and evidence /
We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when foreign banks are better at monitoring highend customers than domestic banks, their entry benefits those customers but may hurt other customers and worsen welfare. The mo...
Saved in:
| Online Access: |
Full text (MCPHS users only) |
|---|---|
| Main Authors: | , , |
| Corporate Author: | |
| Format: | Electronic eBook |
| Language: | English |
| Published: |
[Washington, D.C.] :
International Monetary Fund, Research Dept.,
2006
|
| Series: | IMF working paper ;
WP/06/18. |
| Subjects: | |
| Local Note: | ProQuest Ebook Central |
| Summary: | We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when foreign banks are better at monitoring highend customers than domestic banks, their entry benefits those customers but may hurt other customers and worsen welfare. The model also predicts that credit to the private sector should be lower in countries with more foreign bank penetration. In the empirical section, we show that, in poor countries, a stronger foreign bank presence is robustly associated with less credit to the private sector both in cross-sectional and panel tests. In addition, in countries with more foreign bank penetration, credit growth is slower and there is less access to credit. We find no adverse effects of foreign bank presence in more advanced countries. |
|---|---|
| Physical Description: | 1 online resource (48 pages) |
| Bibliography: | Includes bibliographical references. |
| ISBN: | 1283515288 9781283515283 9781451908145 1451908148 |
| Source of Description, Etc. Note: | Print version record. |
