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Do Foreign Bank Branches Affect Lending of Foreign- and State-owned Banks? Empirical Evidence from CESEE Countries

Emerging Market Finance: New Challenges and Opportunities

ISBN: 978-1-83982-059-5, eISBN: 978-1-83982-058-8

Publication date: 28 September 2020

Abstract

This study examines the effects of foreign branch activity on commercial banks in the Central, Eastern, and Southeastern European countries for the period 1995–2015. The author shows that more foreign bank branches are present in countries that have higher taxes and regulatory restrictions on bank activity. The increased activity of foreign bank branches adversely affects lending by foreign banks, and to a lesser extent, that of state-owned banks. The author attributes this finding to the fact that foreign bank branches and foreign banks compete for the same type of clients, namely, multinational corporations.

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Acknowledgements

Acknowledgments

The author would like to thank the editor Bang Jeon, an anonymous referee, Haekwon Lee, Iftekhar Hasan, and the participants of the 36th GDRE Symposium held in Besançon, 5th ICOAF Conference in Danang City, and 2nd USYD Financing and Banking Research Group Workshop in Sydney for their valuable comments and suggestions. This work was supported by the National Science Center, Poland, grant OPUS9 no. 2015/17/B/HS4/00265.

Citation

Kowalewski, O. (2020), "Do Foreign Bank Branches Affect Lending of Foreign- and State-owned Banks? Empirical Evidence from CESEE Countries", Jeon, B.N. and Wu, J. (Ed.) Emerging Market Finance: New Challenges and Opportunities (International Finance Review, Vol. 21), Emerald Publishing Limited, Leeds, pp. 11-31. https://doi.org/10.1108/S1569-376720200000021002

Publisher

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Emerald Publishing Limited

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