Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance

Brookings-Wharton Papers, Vol. 3, 2000

Posted: 24 Mar 2000

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Robert DeYoung

University of Kansas School of Business

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance

Hesna Genay

Federal Reserve Bank of Chicago

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Abstract

We address the causes, consequences, and implications of the cross-border consolidation of financial institutions by reviewing several hundred studies, providing comparative international data, and estimating cross-border banking efficiency in France, Germany, Spain, the U.K., and the U.S. during the 1990s. We find that, on average, domestic banks have higher profit efficiency than foreign banks. However, banks from at least one country (the U.S.) appear to operate with relatively high efficiency both at home and abroad. If these results continue to hold, they do not preclude successful international expansion by some financial firms, but they do suggest limits to global consolidation.

JEL Classification: G21, G28, G34, E58, L89

Suggested Citation

Berger, Allen N. and DeYoung, Robert and Udell, Gregory F. and Genay, Hesna, Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance. Brookings-Wharton Papers, Vol. 3, 2000. Available at SSRN: https://ssrn.com/abstract=205249

Allen N. Berger

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
United States

European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Robert DeYoung (Contact Author)

University of Kansas School of Business ( email )

Capitol Federal Hall
1654 Naismith Drive
Lawrence, KS 66045
United States
785-864-1806 (Phone)

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

Hesna Genay

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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