Cross-Border Banking, Bank Market Structures and Market Power: Theory and Cross-Country Evidence

Abstract

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Local Versus International Crises, Foreign Subsidiaries and Bank Stability: Evidence from the MENA Region.

“…Most of the research dedicated to subsidiaries has focused on their effect on the host country banking industry and found on the one hand that they provide increased stability during host country crisis, higher access to finance, increased efficiency and competitiveness, and lower lending costs (Claessens, 2006), (Wu, et al, 2011), , and (Bremus & , 2015). On the other hand, they could transmit shocks from home country and destabilize host countries, (Popov & Udell, 2012) (Jeon, et al, 2013).…”

The effect of market structure and risk taking on the efficiency of banks accepted in Tehran stock exchange

“…The analysis of competitive market structure is an important area of marketing research due to its significance in explaining the nature and extent of competition among companies and their products in different fields (Bremus, 2015;Chung & Chuwonganant, 2014;Elrod et al, 2002;Jerbashian, 2011;Jolly, 1998). The impact of market structure on bank efficiency has been widely tested based on the theories of structure-conduct-performance (SCP), relative market power hypothesis (RMP), and the quiet life hypothesis (QLH) (Claeys & Vander Vennet, 2008;Demirguc-Kunt, Laeven, & Levine, 2004;Heffernan, 2005;Kapopoulos & Siokis, 2005;Maudos & De Guevara, 2007;Tregenna, 2009).…”

Granularity in Banking and Growth: Does Financial Openness Matter?

“…These two forms of financial openness may have different effects on the banking sector's Herfindahl index. Cross-border lending puts competitive pressure on domestic banks, market shares may become more similar, and the degree of concentration falls (Bremus 2013). If competition gets more intense, banks absorb a larger part of idiosyncratic shocks by adjusting markups instead of lending rates.…”

“…This would magnify the link between bank-level shock and macroeconomic outcomes via increased concentration. But bank FDI may also decrease concentration if banks' market shares get more similar as presented by Bremus (2013) In order to analyze these linkages, Part 2 introduces the data and explains how we measure granularity, growth, and financial openness. Part 3 has the empirical model and results, and Part 4 concludes.…”