Productivity of Foreign Banks: Evidence from a Financial Center

"Efficiency and Productivity Growth: Modelling in the Financial Services Industry", Fotios Pasiouras ed., May 2013

Posted: 5 Dec 2013

See all articles by Claudia Curi

Claudia Curi

Free University of Bolzano-Bozen, Faculty of Economics and Management

Ana Lozano-Vivas

Independent

Date Written: May 6, 2013

Abstract

How do foreign banks respond to financial crises? Does their response depend on their organizational form, size, and nationality? Do foreign banks perform better than domestic banks? In this chapter, we address all these questions by examining the performance of banks operating in the Luxembourg financial center between 1995 and 2010. Performance is analyzed in terms of productivity change, along with efficiency and technical changes, estimated by Data Envelopment Analysis (DEA)-based Malmquist Index. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into (a) the choice between establishing a branch or a subsidiary and (b) the optimal bank size to take advantages in productivity when developing cross-border activities through the financial center. Moreover, for the local regulators it provides insight into the foreign country with a banking sector more productive and on which the host country might rely more.

Keywords: foreign banks, bank productivity, DEA, Malmquist Index, bootstrap, financial crisis

JEL Classification: B21, C14, D24, D24, G21

Suggested Citation

Curi, Claudia and Lozano-Vivas, Ana, Productivity of Foreign Banks: Evidence from a Financial Center (May 6, 2013). "Efficiency and Productivity Growth: Modelling in the Financial Services Industry", Fotios Pasiouras ed., May 2013, Available at SSRN: https://ssrn.com/abstract=2356794

Claudia Curi (Contact Author)

Free University of Bolzano-Bozen, Faculty of Economics and Management ( email )

Universitätsplatz 1-Piazza Università 1
Bozen-Bolzano, Bolzano 39100
Italy
+39 0471 13498 (Phone)

Ana Lozano-Vivas

Independent

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
357
PlumX Metrics