Location Decisions of Foreign Banks and Competitive Advantage

Claessens, Stijn ; Van Horen, Neeltje

World Bank, Washington, DC

关键词: ACCOUNTABILITY;    ACCOUNTING;    AFFILIATES;    ASSETS;    BANK HOLDING COMPANIES;   

DOI  :  10.1596/1813-9450-4113
RP-ID  :  WPS4113

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

While institutional differences havebeen found to affect country growth patterns, much hasremained unexplained, including how economic actors"overcome" institutional weaknesses and howinternationalization helps or hinders development. Bankingis an institutionally-intensive activity and the locationdecision of foreign banks provides a good test of howinstitutional differences are dealt with and how they mayaffect economic choices. Specifically, the authors examinewhether banks seek out those markets where institutionalfamiliarity provides them with a competitive advantage overother foreign competitor banks. Using bilateral data onbanking sector foreign direct investment in all developingcountries and controlling for other factors, they find thatcompetitive advantage is an important factor in drivingforeign banks' location decisions. The findings suggestthat high institutional quality is not necessarily aprerequisite to attract foreign direct investment in bankingand that there are specific benefits, as well as risks, tointernational financial integration between developing countries.