TY - JOUR
T1 - Institutional development and foreign banks in Chile
AU - Du, Brian
AU - Serrano, Alejandro
AU - Vianna, Andre
N1 - Publisher Copyright:
© 2017 Elsevier Inc.
PY - 2018/7
Y1 - 2018/7
N2 - This paper analyzes the effects of foreign banks on developing countries' bank performance. We study this relationship from a different perspective by focusing on Chile, an emerging market with strong institutions. The results from dynamic panel regressions on hand-collected financial statement data from 2005 to 2014 indicate that foreign banks improve banking sector competitiveness, reduce the volatility of returns, and increase commercial and consumption loans. The overall evidence suggests that, in the presence of solid institutions, foreign banks improve the banking sector in developing countries. Therefore, public policies on foreign banks should be more effective when accompanied by advances in institutions.
AB - This paper analyzes the effects of foreign banks on developing countries' bank performance. We study this relationship from a different perspective by focusing on Chile, an emerging market with strong institutions. The results from dynamic panel regressions on hand-collected financial statement data from 2005 to 2014 indicate that foreign banks improve banking sector competitiveness, reduce the volatility of returns, and increase commercial and consumption loans. The overall evidence suggests that, in the presence of solid institutions, foreign banks improve the banking sector in developing countries. Therefore, public policies on foreign banks should be more effective when accompanied by advances in institutions.
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U2 - 10.1016/j.irfa.2017.10.001
DO - 10.1016/j.irfa.2017.10.001
M3 - Article
AN - SCOPUS:85031090002
SN - 1057-5219
VL - 58
SP - 166
EP - 178
JO - International Review of Financial Analysis
JF - International Review of Financial Analysis
ER -