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...

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Online Access: Full text (MCPHS users only)
Main Authors: Detragiache, Enrica (Author), Tressel, Thierry (Author), Gupta, Poonam (Author)
Corporate Author: International Monetary Fund. Research Department
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

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100 1 |a Detragiache, Enrica,  |e author. 
245 1 0 |a Foreign banks in poor countries :  |b theory and evidence /  |c prepared by Enrica Detragiache, Thierry Tressel, and Poonam Gupta. 
260 |a [Washington, D.C.] :  |b International Monetary Fund, Research Dept.,  |c 2006. 
300 |a 1 online resource (48 pages) 
336 |a text  |b txt  |2 rdacontent 
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490 1 |a IMF working paper ;  |v WP/06/18 
504 |a Includes bibliographical references. 
505 0 |a Contents -- I. INTRODUCTION -- II. EMPIRICAL EVIDENCE ON FOREIGN BANKS IN POOR COUNTRIES -- III. CREAM-SKIMMING EFFECTS OF FOREIGN BANK ENTRY: THEORY -- IV. THE EMPIRICAL TEST: METHODOLOGY AND DATA -- V. RESULTS FROM THE EMPIRICAL TESTS -- VI. CONCLUSIONS -- Appendix I. Welfare Comparison under Alternative Equilibria -- Appendix II. Data Definitions, Sources, and Summary Statistics for Lower- Income Countries -- References 
520 |a 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. 
588 0 |a Print version record. 
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650 0 |a Banks and banking, Foreign  |z Developing countries. 
650 0 |a Banks and banking  |z Developing countries. 
700 1 |a Tressel, Thierry,  |e author. 
700 1 |a Gupta, Poonam,  |e author. 
710 2 |a International Monetary Fund.  |b Research Department. 
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