Foreign bank entry, deregulation and bank efficiency: Lessons from the Australian experience

Sturm, Jan‐Egbert; Williams, Barry

doi:10.1016/j.jbankfin.2003.06.005

Cited by 267 publications

(87 citation statements)

References 32 publications

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“…Efficiency outcomes could be heavily influenced by the characteristics of the merged banks and the economic environment of the country during examination period (Vander Vennet, 1996;Lin, 2005;Resti, 1998;Avkiran, 1999;Drake and Hall, 2003). For example, Avkiran (1999) Efficiency studies of financial liberalization and deregulation generally confirmed obvious positive effects, as high as 25% in Canhoto and Dermine's study of Portugal banks during the deregulation period of 1990 to 1995 (Berg et at., 1992;Zaim, 1995;Chen, 2001;Canhoto and Dermine, 2003;Girardone et al, 2004;Sturm and Williams, 2004). It was consistent with the expectations that a more competitive system would lead to efficiency improvement as banks strived to cut costs and increase profitability.…”

Section: Literatures Of the Cost Efficiency Studysupporting

confidence: 74%

The Development of the Chinese Financial System and Reform of Chinese Commercial Banks

Luo¹

2016

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Section: Literatures Of the Cost Efficiency Studysupporting

confidence: 74%

The Development of the Chinese Financial System and Reform of Chinese Commercial Banks

Luo¹

2016

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“…Moreover, it is found that policy reforms of privatization, liberalization and strengthening of central bank, instead of paying off, led to a decline in efficiency of banks. Sturm and Williams (2004) measured the efficiency of Australian banking system to assess the impact of deregulation and entry of foreign banks in post deregulation period 1998 to 2001. The results showed that bank efficiency has increased in post deregulation period; however, the main source of efficiency improvement was technological change rather than technical efficiency.…”

Section: Literature Reviewmentioning

confidence: 99%

Scale Efficiency in the Banking Sector of Pakistan

Usman¹,

Wang²,

Mahmood³

et al. 2010

IJBM

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The study employs data envelopment analysis to a panel of commercial banks operating in Pakistan for a period 2001 -2008 in order to measure the technical efficiency of banks. Technical efficiency is then broken down into pure technical and scale components. We divide banks into three categories for analytical purposes: state owned banks, domestic private banks and foreign owned banks. We find foreign owned banks to be the most efficient, followed by state owned banks and domestic private banks are found to be the least efficient. Further, it is found that pure technical efficiency contributes more towards technical efficiency and banks are faced with serious scale problems. The scale inefficiency is found to be the main source of overall technical inefficiency. We observe an increasing trend in pure technical efficiency whereas an opposite trend is found in scale efficiency during the sample period.

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“…Studies focusing on the US found that foreign owned banks perform significant worse than domestic banks (see, among others, Nolle 1996, andMahajan, Rangan andZardkoohi 1996). Using data from other industrialized countries, however, studies have documented that foreign banks perform better (Sturm and Williams 2004) or that no differences between foreign and domestic banks exist (Vander Vennet 1996). When studying foreign banks in developing countries, a number of studies have found that foreign banks outperform domestic banks (Grigorian and Manole 2006;Berger, Hasan and Zhou 2009).…”

Section: Introductionmentioning

confidence: 99%

Being a foreigner among domestic banks: Asset or liability?

Claessens

Horen

2012

Journal of Banking & Finance

135

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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

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Foreign bank entry, deregulation and bank efficiency: Lessons from the Australian experience

Cited by 267 publications

References 32 publications

The Development of the Chinese Financial System and Reform of Chinese Commercial Banks

The Development of the Chinese Financial System and Reform of Chinese Commercial Banks

Scale Efficiency in the Banking Sector of Pakistan

Being a foreigner among domestic banks: Asset or liability?

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