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How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis

Author

Listed:
  • Hanneke Bol

    (University of Groningen)

  • Jakob de Haan

    (University of Groningen)

  • Bert Scholtens

    (University of Groningen)

  • Ralph de Haas

    (De Nederlandsche Bank)

Abstract

This paper analyses the development of the banking sector in twelve transition countries. Foreign banks have become major players in the financial system of these countries. Still, foreign bank presence and financial development in general vary considerably between these economies. Distance from the home country is an important determinant for a foreign bank to enter a specific country. The most frequently used mode of entry is buying (part) of a domestic bank. This share is gradually expanded until a majority share is held. It turns out that foreign banks have, in general, higher profitability and efficiency levels than domestic banks.

Suggested Citation

  • Hanneke Bol & Jakob de Haan & Bert Scholtens & Ralph de Haas, 2002. "How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis," International Finance 0209005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpif:0209005
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Marko Košak & Peter Zajc & Jelena Zorić, 2009. "Bank efficiency differences in the new EU member states," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(2), pages 67-90, December.

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    More about this item

    Keywords

    Comparative Financial Systems; Financial Markets; Financial Institutions; Financial Development; Transition Economies.;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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