Foreign Bank Entry and Credit Allocation in Emerging Markets

H.A. Degryse, O. Havrylchyk, E. Jurzyk, S. Kozak

Research output: Working paperDiscussion paperOther research output

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Abstract

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.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages43
Volume2009-94
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-94

Fingerprint

Emerging markets
Foreign bank entry
Credit allocation
Foreign entry
Portfolio composition
Maturity
Currency
Greenfield
Portfolio allocation
Transparency
Bank credit

Keywords

  • banks
  • ownership
  • credit allocation

Cite this

Degryse, H. A., Havrylchyk, O., Jurzyk, E., & Kozak, S. (2009). Foreign Bank Entry and Credit Allocation in Emerging Markets. (CentER Discussion Paper; Vol. 2009-94). Tilburg: Finance.
Degryse, H.A. ; Havrylchyk, O. ; Jurzyk, E. ; Kozak, S. / Foreign Bank Entry and Credit Allocation in Emerging Markets. Tilburg : Finance, 2009. (CentER Discussion Paper).
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Degryse, HA, Havrylchyk, O, Jurzyk, E & Kozak, S 2009 'Foreign Bank Entry and Credit Allocation in Emerging Markets' CentER Discussion Paper, vol. 2009-94, Finance, Tilburg.

Foreign Bank Entry and Credit Allocation in Emerging Markets. / Degryse, H.A.; Havrylchyk, O.; Jurzyk, E.; Kozak, S.

Tilburg : Finance, 2009. (CentER Discussion Paper; Vol. 2009-94).

Research output: Working paperDiscussion paperOther research output

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Degryse HA, Havrylchyk O, Jurzyk E, Kozak S. Foreign Bank Entry and Credit Allocation in Emerging Markets. Tilburg: Finance. 2009. (CentER Discussion Paper).