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Foreign Bank Participation in Developing Countries: What Do We Know About the Drivers and Consequences of this Phenomenon? (Cull R., Martinez Peria M. S.)

Foreign Banks

Abstract Foreign bank participation has increased steadily across developing countries since the mid-1990s. This paper documents this trend and surveys the existing literature to explore the drivers and consequences of this phenomenon, paying particular attention to the differences observed across regions both in the degree of foreign bank participation and in the impact of this process. Local profit opportunities, the absence of barriers to entry, and the presence of mechanisms to mitigate information problems have been the main factors driving foreign bank entry across developing countries. In general, foreign bank participation has been shown to exert a positive influence on banking sector efficiencyand competition. The weight of the evidence suggests that foreign bank presence does not endanger, but rather enhances banking sector stability. And although some case studies suggest that foreign bank entry limits access to finance, many cross-country studies offer evidence to the contrary.
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Libref/ Cull R., Martinez Peria M. S. (2010) "Foreign Bank Participation in Developing Countries: What Do We Know About the Drivers and Consequences of this Phenomenon?", World Bank Policy Research Working Paper No. 5398, pp. 1 - 32
© Программирование — Александр Красильников, 2008
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