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Foreign Bank Entry and Credit Allocation in Emerging Markets
Author:
Sylwester Kozaknull

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,
Ms. Emilia M Jurzyk
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Hans Degrysenull

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Olena Havrylchyknull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 270
Language:
English
Publication Date:
01 Dec 2009
DOI:
https://doi.org/10.5089/9781451874150.001
ISBN:
9781451874150
ISSN:
1018-5941
Pages:
43
Keywords:
WP; greenfield bank; takeover bank; foreign bank; lending rate; bank entry
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2009: Issue 270