Full-text resources of CEJSH and other databases are now available in the new Library of Science.
Visit https://bibliotekanauki.pl

PL EN


Journal

2015 | 2 (59) | 47-76

Article title

The Effect of Recent Changes in Foreign Banks' Behavior on Banking Sector Concentration - First Evidence from 53 Countries

Content

Title variants

Languages of publication

EN

Abstracts

EN
The aim of this paper is to assess the impact of foreign banks’ withdrawals on banking sector concentration. The past decade has been characterized by large scale foreign bank withdrawals from countries where these institutions represent a significant part of the banking sector. An empirical analysis has been conducted for the banking sectors of 53 countries over the period 1997 to 2008. The major finding is that the foreign banks’ withdrawals are positively correlated with banking concentration. The greatest magnitude of the effect can be seen with respect to the deposit market. Surprisingly, however, we do not notice any greater effect of acquisition of divested banks on banking sector concentration as compared to other forms of withdrawals. This might suggest a tendency to split up banking operations among many market players.

Journal

Year

Issue

Pages

47-76

Physical description

Contributors

  • Kozminski University, Warsaw
  • Kozminski University, Warsaw

References

  • 1. Allen, F., Hryckiewicz, A., Kowalewski, O., & Tumer-Alkan, G. (2014): Transmission of bank liquidity shocks in loan and deposit markets: The role of interbank borrowing and market monitoring. Journal of Financial Stability, 15, 112–126.
  • 2. Angelini, P. & Cetorelli, N. (2003): The effects of regulatory reform on competition in the banking industry. Journal of Money, Credit and Banking, 35(5), 663–684.
  • 3. Beck, T., Demirguc-Kunt, A. (2006): Small and medium-size enterprises: Access to finance as a growth constraints. Journal of Banking and Finance, 30, 2931–2943.
  • 4. Bikker, J.A., & Haaf, K. (2002): Competition, concentration and their relationship: An empirical analysis of the banking industry. Journal of Banking & Finance, 26(11), 2191–2214.
  • 5. Bikker, J.A., & Spierdijk, L. (2009): Measuring and explaining competition in the financial sector. Tjalling C. Koopmans Research Institute Discussion Paper Series, 09-01.
  • 6. Carletti, E., Hartmann, P., & Spagnolo, G. (2002): Implications of the bank merger wave for competition and stability. In: Risk Measurement and Systemic Risk , Proceedings of the Third Joint Central Bank Research Conference (Board of Governors of the Federal Reserve System, Bank of Japan, European Central Bank), 38-50.
  • 7. Chortareas, G.E., & Garza-Garcia, J.G., & Girardone, C. (2011): Banking sector performance in Latin America: Market power versus efficiency. Review of Development Economics , 15(2), 307-325.
  • 8. Claessens, S., & Laeven, L. (2004): What drives bank competition? Some international evidence. Journal of Money, Credit and Banking , 36, 563-584.
  • 9. Claessens, S., van Horen, N., Gurcanlar, T., & Sapiain, J.M. (2008): Foreign bank presence in developing countries 1995-2006: Data and trends." Mimeo, The World Bank, Washington, D.C.
  • 10. Claessens, S., & van Horen, N. (2012): Being a foreigner among domestic banks: Asset or liability? Journal of Banking & Finance , 36(5), 1276-1290.
  • 11. Clarke, G.R.G., Cull, R., Martinez Peria, M.S., & Sanchez, S.M. (2003): Foreign bank entry: Experience, implications for developing countries, and agenda for further research. World Bank Research Observer, 18(1), 25-59.
  • 12. Crystal, J.S., Dages, B.G., & Goldberg, L.S. (2002): Has foreign bank entry led to sounder banks in Latin America? Current Issues in Economics and Finance , 8, 1-6.
  • 13. De Haas, R., & van Lelyveld, I. (2003): Foreign bank penetration and private sector credit in Central and Eastern Europe. DNB Staff Reports (discontinued) 91, Netherlands Central Bank.
  • 14. De Haas, R., & van Lelyveld, I. (2010): Internal capital markets and lending by multinational bank subsidiaries. Journal of Financial Intermediation , 19(1), 1-25.
  • 15. Deloitte. (2014): Competition in retail banking. Deloitte Access Economics.
  • 16. Demirgüç-Kunt, A., & Huizinga, H. (2000): Determinants of commercial bank interest margins and profitability: Some international evidence, World Bank Economic Review, 13, 379-408.
  • 17. Demirgüç-Kunt, A., Laeven, L., & Levine, R. (2004): Regulations, market structure, institutions, and the cost of financial intermediation. Journal of Money, Credit, and Banking 36(3), 593-622.
  • 18. Efthyvoulou, G., & Yildirim, C. (2013): Market power in CEE banking sectors and the impact of the global financial crisis. Journal of Banking & Finance , 40, 11-27.
  • 19. Fernández de Guevara, J., Maudos, J., Pérez, F. (2005): Market power in European banking sectors. Journal of Financial Services Research, 27, 109-137.
  • 20. Gonzales, J. (2009): Determinants of bank market structure: Efficiency and political economy variables. Journal of Money, Credit and Banking, 41(4), 735-754.
  • 21. Hasan, I., Kowalewski, O., Kozłowski, Ł ., Jackowicz, K., 2013: Market Discipline during Crisis: Evidence from Bank Depositors in Transition Countries, Journal of Baking and Finance , 37, 5436-5451.
  • 22. Hryckiewicz, A., & Kowalewski, O. (2011): Why do foreign banks withdraw from other nations? International Finance , 1, 67-102.
  • 23. Levine, R. (1996): Foreign banks, financial development, and economic growth. In Barfield, C.E., ed., International Financial Markets. Washington, D.C., AEI Press.
  • 24. OECD (2010): Competition, concentration and stability in the banking sector, available at http://www.oecd.org/regreform/sectors/46040053.pdf
  • 25. Pawlowska, M. (2012): Competition, concentration and foreign capital in the Polish banking sector (prior and during the financial crisis) , National Bank of Poland Working Paper, 130, Warsaw.
  • 26. Rhoades, S.A. (2000): Bank mergers and banking structure in the United States, 1980- 98. Board of Governors of the Federal Reserve System.
  • 27. Smirlock, M. (1985): Evidence on the (non) relationship between concentration and profitability in banking. Journal of Money, Credit, and Banking , 17, 69-83.
  • 28. Uhde, A. & Heimeshoff, U. (2009): Consolidation in banking and financial stability in Europe: Empirical evidence, Journal of Banking & Finance , vol. 33(7), s. 1299-1311, July.
  • 29. Weill, L. (2011): Bank competition in the EU: How has it evolved? Laboratoire de Recherche en Gestion et Economie Working Papers , No. 2011-04.
  • 30. Yeyati, E.L., & Micco, A. (2007): Concentration and foreign penetration in Latin American banking sectors: Impact on competition and risk. Journal of Banking & Finance , 31(6), 1633-1647.

Document Type

Publication order reference

Identifiers

YADDA identifier

bwmeta1.element.desklight-084dc1f4-ef94-4d75-9883-72dd51f65c07
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.