Normal view MARC view ISBD view

Location decisions of foreign banks and competitive advantage

By: Claessens, Stijn.
Contributor(s): Van Horen, Neeltje.
Material type: materialTypeLabelBookPublisher: Washington, D.C. World Bank 2007Description: N.P.Subject(s): Foreign Direct Investment | Economic Theory & Research | Banks and Banking Reform | Corporate LawDDC classification: ER7 Online resources: E-book Summary: 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.
List(s) this item appears in: VR_VSL e-Book collection
Tags from this library: No tags from this library for this title. Log in to add tags.
    average rating: 0.0 (0 votes)
Item type Current location Collection Call number Status Date due Barcode
Electronic Resources Vikram Sarabhai Library
Electronic Resources
Reference ER7 (Browse shelf) Available ER000007

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.

There are no comments for this item.

Log in to your account to post a comment.

Powered by Koha