Foreign bank activity in the United States: An analysis by country of origin

Grosse, Robert; Goldberg, Lawrence G.

doi:10.1016/0378-4266(91)90052-n

Cited by 233 publications

(140 citation statements)

References 18 publications

Supporting

Mentioning

132

Contrasting

Unclassified

Order By: Relevance

“…Second, by studying how distance influences the performance of foreign banks, our study contributes to the rapidly increasing literature on the impact of distance on the activities and performance of financial intermediaries. This includes studies that find evidence of the considerable impact of distance on international investment decisions (Buch 2003), loan rates (DeGryse and Ongena 2005), lending decisions (Mian 2006) and bank branching (Grosse and Goldberg 1991). Third, most studies focus only on one or a small group of (developed or developing) countries, with some notably exceptions, such as Claessens, Demirgüç-Kunt and Huizinga (2001) and Micco, Panizza and Yanez (2007), whereas our results reflect evidence from a large number of countries.…”

Section: Introductionmentioning

confidence: 62%

Being a foreigner among domestic banks: Asset or liability?

Claessens

Horen

2012

Journal of Banking & Finance

135

View full text Add to dashboard Cite

Do foreign banks have an advantage operating abroad? The existing literature has come up with different answers. Studying the performance of foreign banks relative to domestic banks in a large number of countries between 1999 and 2006, we find that the answer importantly depends on a number of factors. Specifically, foreign banks tend to perform better when from a high income country and when competition in the host country is limited. They also perform better when they are large and rely more on deposits for funding. Foreign banks improve their performance over time, possibly as they adapt to the local institutional environment. Foreign banks from home countries geographical or cultural close to the host country perform better than distant foreign banks. Institutional familiarity, however, does not help (improve) foreign banks' performance. These findings show that it is important to control for heterogeneity among foreign banks when studying their performance and help reconcile some contradictory results found in the literature. JEL Classification Codes: F21, F23, G21

show abstract

Section: Introductionmentioning

confidence: 62%

Being a foreigner among domestic banks: Asset or liability?

Claessens

Horen

2012

Journal of Banking & Finance

135

View full text Add to dashboard Cite

show abstract

“…First, foreign banking organizations may be maximizing a broader concept of profit. They may follow their customers abroad to better service their needs and to retain these customers (for example, Grosse and Goldberg 1991;Yamori 1998). Even if the U.S. loans to those customers are not particularly profitable, the retention of the lending relationship may still be in the best interest of the bank.…”

Section: Resultsmentioning

confidence: 99%

The poor performance of foreign bank subsidiaries: Were the problems acquired or created?

Peek

Rosengren

Kasirye

1999

Journal of Banking & Finance

113

View full text Add to dashboard Cite

We examine foreign acquisitions of United States banks around the time of the ownership change to determine whether the observed poor performance of foreign subsidiaries is the result of changes in business strategy or the preexisting characteristics of the target bank. We find that many of the problems were already present at the time of acquisition. However, changes in business strategy by the foreign owners were generally not successful in raising the bank's performance level to that of its domestic peers.

show abstract

“…found that foreign-owned banks or organizations tend to lend to the large corporate affiliates of their customers (Grosse & Goldberg, 1991). Therefore, in the light of procyclicality, which analyzes the relationship between GDP and the change of bank loans, it is assumed that bank loans to SMEs correspond more to the business cycle than bank loans made to LEs.…”

Section: Hypotheses and The Variables That Affect Bank Loansmentioning

confidence: 99%

Are bank loans to SMEs procyclical? Evidence from an analysis of the lending behavior of Korean banks

Seo

2013

SAJBM

View full text Add to dashboard Cite

This paper investigates the procyclicality of bank loans to Small and Medium Enterprises (SMEs) and to Large Enterprises (LEs) using aggregated and cross-sectional data from major private, foreign, and state-owned banks in Korea in the period from 1999 to 2008. Based on previous studies, it is hypothesized that compared to LEs, banks loans to SMEs may be more vulnerable to external economic shock. Berger and Udell (1994) suggested that bank loans to SMEs are comparatively risky due to their relatively low collateral and heavy dependence on banks for raising funds. In this study, empirical tests are verified by applying the rolling vector error correction Model (VECM), panel generalized least squares model (GLS), and the Clustering Fixed Effect Model. Findings include robust support for the procyclicality of bank loan to SMEs, but not for LEs. The review of short-term dynamics among first differential variables such as loans and GDP provides evidence to support a related hypotheses: the profit-oriented motivation of commercial banks in enhancing relationships with SMEs, the characteristics of governance structure in three types of banks (private, state-owned, and foreign owned banks), and the large-bank barriers assumption.

show abstract

Foreign bank activity in the United States: An analysis by country of origin

Cited by 233 publications

References 18 publications

Being a foreigner among domestic banks: Asset or liability?

Being a foreigner among domestic banks: Asset or liability?

The poor performance of foreign bank subsidiaries: Were the problems acquired or created?

Are bank loans to SMEs procyclical? Evidence from an analysis of the lending behavior of Korean banks

Contact Info

Product

Resources

About