Foreign bank entry and credit allocation in emerging markets

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

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Earlier studies have documented that foreign banks charge lower lending rates and interest spreads than domestic banks. We hypothesize that this may stem from the superior efficiency of foreign entrants that they decide to pass onto borrowers (“performance hypothesis”), but could also reflect a different loan allocation with respect to borrower transparency, loan maturity and currency (“portfolio composition hypothesis”). We are able to differentiate between the above hypotheses thanks to a novel dataset containing detailed bank-specific information for the Polish banking industry. Our findings demonstrate that banks differ significantly in terms of portfolio composition and we attest to the “portfolio composition hypothesis” by showing that, having controlled for portfolio composition, there are no differences in lending rates between banks.
Original languageEnglish
Pages (from-to)2949-2959
JournalJournal of Banking and Finance
Volume36
Issue number11
DOIs
Publication statusPublished - 2012

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Emerging markets
Foreign bank entry
Credit allocation
Portfolio composition
Loans
Lending
Maturity
Currency
Banking industry
Foreign banks
Transparency
Charge

Cite this

Degryse, H.A. ; Havrylchyk, O. ; Jurzyk, E. ; Kozak, S. / Foreign bank entry and credit allocation in emerging markets. In: Journal of Banking and Finance. 2012 ; Vol. 36, No. 11. pp. 2949-2959.
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Degryse, HA, Havrylchyk, O, Jurzyk, E & Kozak, S 2012, 'Foreign bank entry and credit allocation in emerging markets', Journal of Banking and Finance, vol. 36, no. 11, pp. 2949-2959. https://doi.org/10.1016/j.jbankfin.2011.12.006

Foreign bank entry and credit allocation in emerging markets. / Degryse, H.A.; Havrylchyk, O.; Jurzyk, E.; Kozak, S.

In: Journal of Banking and Finance, Vol. 36, No. 11, 2012, p. 2949-2959.

Research output: Contribution to journalArticleScientificpeer-review

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