Foreign Banks in Poor Countries Theory and Evidence

Author/creator Detragiache, Enrica Author
Other author Gupta, Poonam Author
Other author Tressel, Thierry Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Description29 p.
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation 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.
Access restrictionAvailable only to authorized users.
Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781451908145
ISBN1451908148 (E-Book) Active Record
Stock number00013468

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