Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers

Existing evidence on the effect of foreign bank penetration on lending to small and medium-size enterprises is ambiguous. Case studies of developing countries show that foreign banks lend less to such firms than domestic banks do. But cross-country...

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Main Authors:	Clarke, George R.G., Cull, Robert, Martinez Peria, Maria Soledad
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING ADVERSE EFFECTS BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK LENDING BANK MARKETING BANK MERGERS BANK OF KOREA BANK REGULATION BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SERVICES BANKING SYSTEMS BORROWING CENTRAL BANKS COMMERCIAL BANK LOANS COMMERCIAL BANKS COMMERCIAL LOANS CONSOLIDATION CORPORATE BANKING DEPOSITS DISECONOMIES ECONOMETRIC ANALYSIS ECONOMIC RESEARCH ECONOMICS EMPIRICAL ANALYSIS EXPORT GROWTH EXPORTS FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FOREIGN BANKS FOREIGN COMPETITION FOREIGN ENTRY FOREIGN EXCHANGE GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT SUBSIDIES GROWTH RATE INFLATION INFLATION RATE INSTITUTIONAL ENVIRONMENT INTEREST RATES M2 MACROECONOMIC CONDITIONS MAXIMUM LIKELIHOOD ESTIMATION OVERHEAD COSTS PER CAPITA INCOME PORTFOLIOS PRIVATE BANKS PROFITABILITY PROVINCIAL BANKS PRUDENTIAL REGULATION PRUDENTIAL REGULATION AND SUPERVISION RELATIONSHIP LENDING RETAIL BANKING RETAINED EARNINGS SHAREHOLDING SIDE EFFECTS SMALL BANKS SMALL BUSINESS SUPERVISORY AGENCIES SUPERVISORY AUTHORITIES TAXATION TRADING TRANSITION ECONOMIES UNIVERSAL BANKING FOREIGN BANKS ACCESS TO CREDIT SMALL & MEDIUM SCALE ENTERPRISES CROSS-COUNTRY EXPERIENCE CASE STUDIES COMPETITION POLICY INTEREST RATE REDUCTIONS INDUSTRIAL ENTERPRISES ECONOMETRIC MODELS OF ECONOMIC DEVELOPMENT ENTERPRISE SIZE UNIVERSAL BANKING
Online Access:	http://documents.worldbank.org/curated/en/2001/11/1631787/foreign-bank-penetration-reduce-access-credit-developing-countries-evidence-asking-borrowers http://hdl.handle.net/10986/19437

id	okr-10986-19437
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spelling	okr-10986-194372021-04-23T14:03:43Z Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers Clarke, George R.G. Cull, Robert Martinez Peria, Maria Soledad ACCOUNTING ADVERSE EFFECTS BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK LENDING BANK MARKETING BANK MERGERS BANK OF KOREA BANK REGULATION BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SERVICES BANKING SYSTEMS BORROWING CENTRAL BANKS COMMERCIAL BANK LOANS COMMERCIAL BANKS COMMERCIAL LOANS CONSOLIDATION CORPORATE BANKING DEPOSITS DISECONOMIES ECONOMETRIC ANALYSIS ECONOMIC RESEARCH ECONOMICS EMPIRICAL ANALYSIS EXPORT GROWTH EXPORTS FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FOREIGN BANKS FOREIGN COMPETITION FOREIGN ENTRY FOREIGN EXCHANGE GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT SUBSIDIES GROWTH RATE INFLATION INFLATION RATE INSTITUTIONAL ENVIRONMENT INTEREST RATES M2 MACROECONOMIC CONDITIONS MAXIMUM LIKELIHOOD ESTIMATION OVERHEAD COSTS PER CAPITA INCOME PORTFOLIOS PRIVATE BANKS PROFITABILITY PROVINCIAL BANKS PRUDENTIAL REGULATION PRUDENTIAL REGULATION AND SUPERVISION RELATIONSHIP LENDING RETAIL BANKING RETAINED EARNINGS SHAREHOLDING SIDE EFFECTS SMALL BANKS SMALL BUSINESS SUPERVISORY AGENCIES SUPERVISORY AUTHORITIES TAXATION TRADING TRANSITION ECONOMIES UNIVERSAL BANKING FOREIGN BANKS ACCESS TO CREDIT SMALL & MEDIUM SCALE ENTERPRISES CROSS-COUNTRY EXPERIENCE CASE STUDIES COMPETITION POLICY INTEREST RATES INTEREST RATE REDUCTIONS INDUSTRIAL ENTERPRISES ECONOMETRIC MODELS OF ECONOMIC DEVELOPMENT ENTERPRISE SIZE UNIVERSAL BANKING Existing evidence on the effect of foreign bank penetration on lending to small and medium-size enterprises is ambiguous. Case studies of developing countries show that foreign banks lend less to such firms than domestic banks do. But cross-country studies find that foreign bank entry fosters competition and reduces interest rates, benefits that should extend to all firms. The authors use data from a large cross-country survey of enterprises to investigate this issue. Their results suggest that foreign bank penetration improves financing conditions (both the quantities of financing and the terms) for enterprises of all sizes, although it seems to benefit larger firms more. 2014-08-19T18:08:07Z 2014-08-19T18:08:07Z 2001-11 http://documents.worldbank.org/curated/en/2001/11/1631787/foreign-bank-penetration-reduce-access-credit-developing-countries-evidence-asking-borrowers http://hdl.handle.net/10986/19437 English en_US Policy Research Working Paper;No. 2716 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ADVERSE EFFECTS BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK LENDING BANK MARKETING BANK MERGERS BANK OF KOREA BANK REGULATION BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SERVICES BANKING SYSTEMS BORROWING CENTRAL BANKS COMMERCIAL BANK LOANS COMMERCIAL BANKS COMMERCIAL LOANS CONSOLIDATION CORPORATE BANKING DEPOSITS DISECONOMIES ECONOMETRIC ANALYSIS ECONOMIC RESEARCH ECONOMICS EMPIRICAL ANALYSIS EXPORT GROWTH EXPORTS FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FOREIGN BANKS FOREIGN COMPETITION FOREIGN ENTRY FOREIGN EXCHANGE GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT SUBSIDIES GROWTH RATE INFLATION INFLATION RATE INSTITUTIONAL ENVIRONMENT INTEREST RATES M2 MACROECONOMIC CONDITIONS MAXIMUM LIKELIHOOD ESTIMATION OVERHEAD COSTS PER CAPITA INCOME PORTFOLIOS PRIVATE BANKS PROFITABILITY PROVINCIAL BANKS PRUDENTIAL REGULATION PRUDENTIAL REGULATION AND SUPERVISION RELATIONSHIP LENDING RETAIL BANKING RETAINED EARNINGS SHAREHOLDING SIDE EFFECTS SMALL BANKS SMALL BUSINESS SUPERVISORY AGENCIES SUPERVISORY AUTHORITIES TAXATION TRADING TRANSITION ECONOMIES UNIVERSAL BANKING FOREIGN BANKS ACCESS TO CREDIT SMALL & MEDIUM SCALE ENTERPRISES CROSS-COUNTRY EXPERIENCE CASE STUDIES COMPETITION POLICY INTEREST RATES INTEREST RATE REDUCTIONS INDUSTRIAL ENTERPRISES ECONOMETRIC MODELS OF ECONOMIC DEVELOPMENT ENTERPRISE SIZE UNIVERSAL BANKING
spellingShingle	ACCOUNTING ADVERSE EFFECTS BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK LENDING BANK MARKETING BANK MERGERS BANK OF KOREA BANK REGULATION BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SERVICES BANKING SYSTEMS BORROWING CENTRAL BANKS COMMERCIAL BANK LOANS COMMERCIAL BANKS COMMERCIAL LOANS CONSOLIDATION CORPORATE BANKING DEPOSITS DISECONOMIES ECONOMETRIC ANALYSIS ECONOMIC RESEARCH ECONOMICS EMPIRICAL ANALYSIS EXPORT GROWTH EXPORTS FEDERAL DEPOSIT INSURANCE FEDERAL DEPOSIT INSURANCE CORPORATION FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FOREIGN BANKS FOREIGN COMPETITION FOREIGN ENTRY FOREIGN EXCHANGE GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT SUBSIDIES GROWTH RATE INFLATION INFLATION RATE INSTITUTIONAL ENVIRONMENT INTEREST RATES M2 MACROECONOMIC CONDITIONS MAXIMUM LIKELIHOOD ESTIMATION OVERHEAD COSTS PER CAPITA INCOME PORTFOLIOS PRIVATE BANKS PROFITABILITY PROVINCIAL BANKS PRUDENTIAL REGULATION PRUDENTIAL REGULATION AND SUPERVISION RELATIONSHIP LENDING RETAIL BANKING RETAINED EARNINGS SHAREHOLDING SIDE EFFECTS SMALL BANKS SMALL BUSINESS SUPERVISORY AGENCIES SUPERVISORY AUTHORITIES TAXATION TRADING TRANSITION ECONOMIES UNIVERSAL BANKING FOREIGN BANKS ACCESS TO CREDIT SMALL & MEDIUM SCALE ENTERPRISES CROSS-COUNTRY EXPERIENCE CASE STUDIES COMPETITION POLICY INTEREST RATES INTEREST RATE REDUCTIONS INDUSTRIAL ENTERPRISES ECONOMETRIC MODELS OF ECONOMIC DEVELOPMENT ENTERPRISE SIZE UNIVERSAL BANKING Clarke, George R.G. Cull, Robert Martinez Peria, Maria Soledad Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
relation	Policy Research Working Paper;No. 2716
description	Existing evidence on the effect of foreign bank penetration on lending to small and medium-size enterprises is ambiguous. Case studies of developing countries show that foreign banks lend less to such firms than domestic banks do. But cross-country studies find that foreign bank entry fosters competition and reduces interest rates, benefits that should extend to all firms. The authors use data from a large cross-country survey of enterprises to investigate this issue. Their results suggest that foreign bank penetration improves financing conditions (both the quantities of financing and the terms) for enterprises of all sizes, although it seems to benefit larger firms more.
format	Publications & Research :: Policy Research Working Paper
author	Clarke, George R.G. Cull, Robert Martinez Peria, Maria Soledad
author_facet	Clarke, George R.G. Cull, Robert Martinez Peria, Maria Soledad
author_sort	Clarke, George R.G.
title	Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
title_short	Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
title_full	Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
title_fullStr	Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
title_full_unstemmed	Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers
title_sort	does foreign bank penetration reduce access to credit in developing countries? evidence from asking borrowers
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2001/11/1631787/foreign-bank-penetration-reduce-access-credit-developing-countries-evidence-asking-borrowers http://hdl.handle.net/10986/19437
_version_	1764439858019827712

Does Foreign Bank Penetration Reduce Access to Credit in Developing Countries? Evidence from Asking Borrowers

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