Foreign Bank Entry and Credit Allocation in Emerging Markets
December 1, 2009
Download PDF
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary
We employ a unique data set containing bank-specific information to explore how foreign bank entry determines credit allocation in emerging markets. We investigate the impact of the mode of foreign entry (greenfield or takeover) on banks' portfolio allocation to borrowers with different degrees of informational transparency, as well as by maturities and currencies. The impact of foreign entry on credit allocation may stem from the superior performance of foreign entrants ("performance hypothesis"), or reflect borrower informational capture ("portfolio composition hypothesis"). Our results are broadly in line with the portfolio composition hypothesis, showing that borrower informational capture determines bank credit allocation.m
Subject: Bank credit, Banking, Currencies, Foreign banks, Loans
Keywords: bank entry, foreign bank, greenfield bank, lending rate, takeover bank, WP
Pages:
43
Volume:
2009
DOI:
Issue:
270
Series:
Working Paper No. 2009/270
Stock No:
WPIEA2009270
ISBN:
9781451874150
ISSN:
1018-5941
