Do foreign banks increase competition? Evidence from emerging Asian and Latin American banking markets

Jeon, Bang Nam; Olivero, María Pía; Wu, Ji

doi:10.1016/j.jbankfin.2010.10.012

Cited by 204 publications

(127 citation statements)

References 30 publications

(29 reference statements)

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“…This result is consistent with those of some studies in favor of foreign bank entry (see, e.g., Giannetti and Ongena 2005;Jeon et al 2011).…”

supporting

confidence: 93%

“…At the bank-province level, however, we find that foreign banks offer fewer per capita deposits and less credit then domestic banks, clearly indicating that foreign banks do not boost outreach by offering higher levels of deposits and issuing more loans, but by increasing competitive pressure and inducing domestic banks to offer higher levels of deposits and issue more loans. Jeon et al (2011), who find that an The variable is lagged by one period. * Statistical significance at the 10 percent level; ** statistical significance at the 5 percent level; *** statistical significance at 1 percent level.…”

Section: Evidence From Bank-province-level Regressionsmentioning

confidence: 99%

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Bank Competition and Outreach: Evidence from Turkey

Aysan

Disli

Schoors

2013

Emerging Markets Finance and Trade

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In light of the importance of banking sector outreach and given concerns that competition may adversely affect it, this study explores the empirical linkage between banking structure and outreach in Turkey for the period 1988-2010. Bank-, province-, and bank-province-level estimation results indicate that competition is in general conducive to the outreach of banks. We do not find evidence for collusive behavior among banks when they have multimarket contact. At the province level, the presence of foreign-owned banks is associated with higher outreach, while at the bank-province level, we observe that outreach of domestic banks exceeds that of foreign banks. Together, these results suggest that there are procompetitive spillover effects from foreign banks to their domestic counterparts.

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“…This result is consistent with those of some studies in favor of foreign bank entry (see, e.g., Giannetti and Ongena 2005;Jeon et al 2011).…”

supporting

confidence: 93%

Section: Evidence From Bank-province-level Regressionsmentioning

confidence: 99%

Bank Competition and Outreach: Evidence from Turkey

Aysan

Disli

Schoors

2013

Emerging Markets Finance and Trade

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“…The proponents of foreign bank entry argue that foreign banks benefit the domestic banking market; the presence of foreign banks is claimed to enhance competition in the local banking market (Jeon et al 2011) and eventually improve the efficiency of domestic banking operations and increase the availability of credit (Claessens et al 2001;Clarke et al 2001;Levy-Yeyati and Micco 2007;Yildirim and Philippatos 2007;Claessens 2009;Olivero et al 2009;Wu et al 2010). For instance, a cross-country study shows that the presence of foreign bank has been associated with lower profitability and lower overhead expenses for the domestic banks, and hence with enhanced domestic banking efficiency (Claessens et al 2001).…”

Section: Introductionmentioning

confidence: 99%

Efficiency and Competition in the Malaysian Banking Market: Foreign versus Domestic Banks

Ab-Rahim

2017

GADJAH MADA INT. J. BUS.

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Abstract:The aim of this paper is to investigate how efficient the performance of the Malaysian banking market is, using a data envelopment analysis approach, in the context of the increasing presence of foreign banks. Specifically, two measures of efficiency are constructed, cost and profit efficiency, by utilizing bank-level data from Malaysian commercial banks, over the period from 2003 to 2014. The results obtained show the domestic banks are more efficient than their foreign banking counterparts for both measures of efficiency. Next, the Lerner index approach was employed to measure competition and finally, Granger causality tests were undertaken to answer the question, does competition foster efficiency? The results of the causality tests support a positive effect of competition on the cost and profit efficiency of Malaysian banks. With regard to the financial liberalization, the findings imply that higher competitive pressure may offset the market power of individual banks; however, eventually it will result in efficiency gains for the Malaysian banks.

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“…the threat of entry by potential competitors, is more important for competitive behavior than market structures like concentration. Empirical evidence by Jeon et al (2011) for Asia and Latin America points into the same direction. Higher foreign bank participation fosters competition in the host market, and this is the more so the more efficient the entering banks and the less concentrated the host markets are.…”

Section: Motivationmentioning

confidence: 79%

Cross-border banking, bank market structures and market power: Theory and cross-country evidence

Bremus¹

2015

Journal of Banking & Finance

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Do foreign banks increase competition? Evidence from emerging Asian and Latin American banking markets

Cited by 204 publications

References 30 publications

Bank Competition and Outreach: Evidence from Turkey

Bank Competition and Outreach: Evidence from Turkey

Efficiency and Competition in the Malaysian Banking Market: Foreign versus Domestic Banks

Cross-border banking, bank market structures and market power: Theory and cross-country evidence

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