How Do Foreign Banks Contribute to Economic Development in Transition Economies - How Much Do We Know About Challenges and Opportunities?

Proceedings of the 14th Annual World Business Congress IMDA, 2005

Posted: 19 Dec 2008 Last revised: 10 Feb 2011

See all articles by Peter R. Haiss

Peter R. Haiss

WU Vienna University of Economics and Business; UniCredit Bank Austria; IES Vienna - Institute for the International Education of Students

Katharina Steiner

Oesterreichsiche Nationalbank (OeNB)

Markus Eller

Oesterreichische Nationalbank (OeNB)

Date Written: 2005

Abstract

This paper contributes to the finance-growth debate by reviewing the relationship between financial sector foreign direct investment and economic growth. The positive view of the finance-led growth hypothesis normally focuses on more open and liberalized financial systems. Banking markets in Central European transition economies are an extreme case of openness as they are majority-held foreign. Does this spur economic growth? We contribute to the development literature by discussing through what kind of transmission channels foreign banks may have an impact on economic growth in transition economies. This is important for emerging market development.

Keywords: economic development, financial services foreign direct investment, foreign banks, financial sector economics, transition economies

JEL Classification: E44, F15, F36, G15, G21, G34, P34, M16, O11, O16

Suggested Citation

Haiss, Peter R. and Steiner, Katharina and Eller, Markus, How Do Foreign Banks Contribute to Economic Development in Transition Economies - How Much Do We Know About Challenges and Opportunities? (2005). Proceedings of the 14th Annual World Business Congress IMDA, 2005. Available at SSRN: https://ssrn.com/abstract=1317616

Peter R. Haiss (Contact Author)

WU Vienna University of Economics and Business ( email )

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Katharina Steiner

Oesterreichsiche Nationalbank (OeNB) ( email )

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Markus Eller

Oesterreichische Nationalbank (OeNB) ( email )

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