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What makes foreign bank entry affect domestic bank markets? A dynamic panel data analysis
|關鍵字:||Foreign bank entry;外商銀行進入;Domestic bank markets;Economic development;Financial development;Business cycle;BankScope;Dynamic panel model;本國銀行績效;經濟發展程度;金融發展程度;景氣循環;動態追蹤資料||出版社:||應用經濟學系所||引用:||Arellano, M., Bond, S., 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies 58, 277-297. Arellano, M., Bover, O., 1995. Another look at the instrumental variables estimation of error components models. Journal of Econometrics 68, 29-51. Barajas, A., Steiner, R., Salazar, N., 2000. The impact of liberalization and foreign investment in Colombia's financial sector. Journal of Development Economics. 63, 157-196. Beck, T., Demirgüç-Kunt, A., Levine, R., 2000. A New Database on Financial Development and Structure. World Bank Economic Review 14, 597-605. Beck, T., Lensink, R., 2002. Stock markets, banks, and growth: Panel evidence. NBER Working Paper, No. 9082. Bongini, P., Claessens, S., Giovanni, F., 2001. The political economy of distress in east Asian financial institutions. Journal of Financial Services Research 19, 5-25. Bonin, J. P., Hasan I., Wachtel, P., 2005. Bank performance, efficiency and ownership in transition countries. Journal of Banking and Finance 29, 31-53. Blundell, R. Bond, S., 1998. Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometric 87, 115-143. Claessens, S., Demirguc-Kunt A., Huizinga, H., 2001. How Does Foreign Entry Affect Domestic Banking Markets? Journal of Banking and Finance 25, 891-911. Claessens, S., Djankov, S., Fan, J., Lang, L., 2000. The separation of Ownership and Control in East Asia Corporations. Journal of Financial Economics 58, 81-112. Grigorian, D., Manole, V., 2002. Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis. World Bank Policy Research Working Paper 2850, June 2002. King, R.G., Levine R., 1993. Finance and Growth: Schumpeter might be right. Quarterly Journal of Economics 108(3), 717-37. Haas R. de, Lelyveld, I. V., 2006. Foreign banks and credit stability in Central and Eastern Europe A panel data analysis. Journal of Banking and Finance 30 1927-1952. Lensink, R., Hermes, N., 2004a. The short-term effects of foreign bank entry on domestic banks: Does economic development matter? Journal of Banking and Finance 28, 553-568. Lensink, R., Hermes, N., 2004b. Foreign Bank Presence, Domestic Bank Performance and Financial Development. Journal of Emerging Market Finance 3, 207-229. Levine, R., Loayza, N., Beck, T., 2000. Financial Intermediation and Growth: Causality and Causes. Journal of Monetary Economics 46, 31-77. Levine, R., Zervos, S., 1998. Stock Markets, Banks, and Economic Growth. American Economic Review 88(3), 537-58. Okuda, H., Rungsomboon, S., 2004. The Effects of Foreign Bank Entry on the Thai Banking Market: Empirical Analysis from 1990 to 2002. Center for Economic Institutions Working Paper, Series No. 2004-20. Ram, R., 1999. Financial Development and Economic Growth: Additional Evidence. Journal of Development Studies 35(4), 164-174. Rioja, F., Valev, N., 2004. Does one size fit all: a reexamination of the finance and growth relationship. Journal of Development Economics 74, 429- 447. Rousseau, P.L., Wachtel, P., 2000. Equity markets and growth: Cross-country evidence on timing and outcomes, 1980-1995. Journal of Banking and Finance 24, 1933-1957. Roodman, D., 2006. How to Do xtabond2: An Introduction to “Difference” and “System” GMM in Stata. The Center for Global Development Working Paper, Number 103. Shen, C. H., Lee, C. C., 2006. Same Financial Development yet Different Economic Growth -- Why？ Journal of Money, Credit and Banking 38, 1907-1944. Unite A. A., Sullivan, M. J., 2003. The effect of foreign entry and ownership structure on the Philippine domestic banking market. Journal of Banking and Finance 27, 2323-2345. World Bank (2005), World Development Indicators, Washington, DC World Bank. Yildirim, H.S., Philippatos, G.C., 2002. Efficiency of Banks: Recent Evidence from the Transition Economies of Europe - 1993-2000. Unpublished paper, April 2002.||摘要:||
The purpose of this paper is to investigate how the foreign bank entry in a host country affects domestic bank performance and whether this relationship depends on the economic and financial conditions. The panel data sample consists of 795 individual banks in 39 countries for the period 1991-2006.The departs from previous studies in the following three aspects. First, this paper adopts the percentage of foreign ownership as a proxy for the degree of foreign bank entry. Secondly, this paper comprehensively proposes three conditions affecting the relationship, such as economic development, financial development, and business cycles. Finally, in addition to the conventional static panel data model, Generalized Method of Moments (GMM) technique, a commonly used estimation procedure for dynamic panel data models, is applied.
Empirical results confirm the premise that economic and financial conditions do have an impact on the relationship in the dynamic panel framework, and are demonstrated as follows. Firstly, foreign bank entry is associated with a decrease in profitability and overhead expenses of the domestic bank particularly in using the dynamic panel model. Moreover, the lower level of economic development mitigates the positive effect of foreign bank entry on non-interest income and overhead expenses of domestic banks. Third, the results of financial development consists of two parts: the lower level of bank development mitigates the positive effect of foreign bank entry on net interest margin, profitability, overhead expenses and loan loss provision of domestic banks. The lower level of stock development mitigates the positive effects of foreign bank entry on non-interest incomes and loan loss provision, and strengthens the positive effects of foreign bank entry on profitability of domestic banks. Finally, the business cycle mitigates the positive effect of foreign bank entry on the margins and profit for domestic banks implying that business cycles are an important role in determining the effect of foreign bank entry. This paper concludes that foreign bank entry has direct effects on domestic bank performance, especially when conditional factors are taken into consideration.
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