Location Decisions of Foreign Banks and Competitive Advantage
While institutional differences have been found to affect country growth patterns, much has remained unexplained, including how economic actors "overcome" institutional weaknesses and how internationalization helps or hinders development....
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/01/7326823/location-decisions-foreign-banks-competitive-advantage-location-decisions-foreign-banks-competitive-advantage http://hdl.handle.net/10986/6891 |
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okr-10986-68912021-04-23T14:02:32Z Location Decisions of Foreign Banks and Competitive Advantage Claessens, Stijn Van Horen, Neeltje ACCOUNTABILITY ACCOUNTING AFFILIATES ASSETS BANK HOLDING COMPANIES BANKING SECTOR BANKING SYSTEM BENCHMARK BILATERAL TRADE CAPITAL FLOWS COMMERCIAL BANKS COMPETITIVE ADVANTAGE COMPETITIVE ADVANTAGES COMPETITIVENESS CONSOLIDATION COOPERATIVE BANKS DEVELOPING COUNTRIES DOMESTIC FIRMS ECONOMIC GROWTH ECONOMIC SIZE EXPECTED VALUE FDI FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN MARKET FOREIGN MARKETS FOREIGN OWNERSHIP FUTURE RESEARCH GDP GDP PER CAPITA HOST COUNTRIES HOST COUNTRY INCOME INCOME LEVELS INSTITUTIONAL DEVELOPMENT INSTITUTIONAL DIFFERENCES INTERNATIONAL BANKING INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INVESTMENT CLIMATE LENDING PRACTICES LESS DEVELOPED COUNTRIES LIMITED M2 MIDDLE EAST MULTINATIONAL ENTERPRISE ORGANIZATIONAL FORM PROFITABILITY SHAREHOLDER SMALL BANKS SMALL BUSINESS SMES SUB-SAHARAN AFRICA SUBSIDIARIES TAX INCENTIVES TRADE FLOWS While institutional differences have been found to affect country growth patterns, much has remained unexplained, including how economic actors "overcome" institutional weaknesses and how internationalization helps or hinders development. Banking is an institutionally-intensive activity and the location decision of foreign banks provides a good test of how institutional differences are dealt with and how they may affect economic choices. Specifically, the authors examine whether banks seek out those markets where institutional familiarity provides them with a competitive advantage over other foreign competitor banks. Using bilateral data on banking sector foreign direct investment in all developing countries and controlling for other factors, they find that competitive advantage is an important factor in driving foreign banks' location decisions. The findings suggest that high institutional quality is not necessarily a prerequisite to attract foreign direct investment in banking and that there are specific benefits, as well as risks, to international financial integration between developing countries. 2012-06-01T18:04:25Z 2012-06-01T18:04:25Z 2007-01 http://documents.worldbank.org/curated/en/2007/01/7326823/location-decisions-foreign-banks-competitive-advantage-location-decisions-foreign-banks-competitive-advantage http://hdl.handle.net/10986/6891 English Policy Research Working Paper; No. 4113 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank 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 |
| topic |
ACCOUNTABILITY ACCOUNTING AFFILIATES ASSETS BANK HOLDING COMPANIES BANKING SECTOR BANKING SYSTEM BENCHMARK BILATERAL TRADE CAPITAL FLOWS COMMERCIAL BANKS COMPETITIVE ADVANTAGE COMPETITIVE ADVANTAGES COMPETITIVENESS CONSOLIDATION COOPERATIVE BANKS DEVELOPING COUNTRIES DOMESTIC FIRMS ECONOMIC GROWTH ECONOMIC SIZE EXPECTED VALUE FDI FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN MARKET FOREIGN MARKETS FOREIGN OWNERSHIP FUTURE RESEARCH GDP GDP PER CAPITA HOST COUNTRIES HOST COUNTRY INCOME INCOME LEVELS INSTITUTIONAL DEVELOPMENT INSTITUTIONAL DIFFERENCES INTERNATIONAL BANKING INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INVESTMENT CLIMATE LENDING PRACTICES LESS DEVELOPED COUNTRIES LIMITED M2 MIDDLE EAST MULTINATIONAL ENTERPRISE ORGANIZATIONAL FORM PROFITABILITY SHAREHOLDER SMALL BANKS SMALL BUSINESS SMES SUB-SAHARAN AFRICA SUBSIDIARIES TAX INCENTIVES TRADE FLOWS |
| spellingShingle |
ACCOUNTABILITY ACCOUNTING AFFILIATES ASSETS BANK HOLDING COMPANIES BANKING SECTOR BANKING SYSTEM BENCHMARK BILATERAL TRADE CAPITAL FLOWS COMMERCIAL BANKS COMPETITIVE ADVANTAGE COMPETITIVE ADVANTAGES COMPETITIVENESS CONSOLIDATION COOPERATIVE BANKS DEVELOPING COUNTRIES DOMESTIC FIRMS ECONOMIC GROWTH ECONOMIC SIZE EXPECTED VALUE FDI FINANCIAL DEEPENING FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL SUPPORT FOREIGN BANK FOREIGN BANKS FOREIGN DIRECT INVESTMENT FOREIGN ENTRY FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN MARKET FOREIGN MARKETS FOREIGN OWNERSHIP FUTURE RESEARCH GDP GDP PER CAPITA HOST COUNTRIES HOST COUNTRY INCOME INCOME LEVELS INSTITUTIONAL DEVELOPMENT INSTITUTIONAL DIFFERENCES INTERNATIONAL BANKING INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL INVESTMENT CLIMATE LENDING PRACTICES LESS DEVELOPED COUNTRIES LIMITED M2 MIDDLE EAST MULTINATIONAL ENTERPRISE ORGANIZATIONAL FORM PROFITABILITY SHAREHOLDER SMALL BANKS SMALL BUSINESS SMES SUB-SAHARAN AFRICA SUBSIDIARIES TAX INCENTIVES TRADE FLOWS Claessens, Stijn Van Horen, Neeltje Location Decisions of Foreign Banks and Competitive Advantage |
| relation |
Policy Research Working Paper; No. 4113 |
| description |
While institutional differences have
been found to affect country growth patterns, much has
remained unexplained, including how economic actors
"overcome" institutional weaknesses and how
internationalization helps or hinders development. Banking
is an institutionally-intensive activity and the location
decision of foreign banks provides a good test of how
institutional differences are dealt with and how they may
affect economic choices. Specifically, the authors examine
whether banks seek out those markets where institutional
familiarity provides them with a competitive advantage over
other foreign competitor banks. Using bilateral data on
banking sector foreign direct investment in all developing
countries and controlling for other factors, they find that
competitive advantage is an important factor in driving
foreign banks' location decisions. The findings suggest
that high institutional quality is not necessarily a
prerequisite to attract foreign direct investment in banking
and that there are specific benefits, as well as risks, to
international financial integration between developing countries. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Claessens, Stijn Van Horen, Neeltje |
| author_facet |
Claessens, Stijn Van Horen, Neeltje |
| author_sort |
Claessens, Stijn |
| title |
Location Decisions of Foreign Banks and Competitive Advantage |
| title_short |
Location Decisions of Foreign Banks and Competitive Advantage |
| title_full |
Location Decisions of Foreign Banks and Competitive Advantage |
| title_fullStr |
Location Decisions of Foreign Banks and Competitive Advantage |
| title_full_unstemmed |
Location Decisions of Foreign Banks and Competitive Advantage |
| title_sort |
location decisions of foreign banks and competitive advantage |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/01/7326823/location-decisions-foreign-banks-competitive-advantage-location-decisions-foreign-banks-competitive-advantage http://hdl.handle.net/10986/6891 |
| _version_ |
1764401262471675904 |