The Dynamics of Foreign Bank Ownership: Evidence from Hungary

30 Pages Posted: 20 Apr 2016

See all articles by Giovanni Majnoni

Giovanni Majnoni

World Bank

Rashmi Shankar

World Bank

Eva Varhegyi

Financial Research Ltd, Budapest

Date Written: August 6, 2003

Abstract

The early start of the process of bank restructuring and privatization in Hungary provides a longer and richer amount of evidence than that available for any other transition economy. Majnoni, Shankar, and Varhegyi analyze the dynamics of bank restructuring in Hungary with a focus on the role played by foreign ownership. They explore the performance over time of foreign-owned Hungarian banks and study the extent to which efficiency gains are affected by the chosen acquisition strategy-strategic acquisition in contrast with investment in a newly established bank (greenfield investment) - or by the management style adopted after the acquisition. The authors supplement previous results on the effects of foreign bank ownership in three ways. First, they explicitly consider the time span required for the change of ownership to affect bank performance. Second, the authors explore how important the chosen acquisition strategy is for the success of an acquisition. And third, they study how relevant the adopted management style is to this end, as proxied by the degree of reliance on foreign management.

This paper - a product of the Financial Sector Network - is part of a larger effort to study the effects of financial liberalization.

Suggested Citation

Majnoni, Giovanni and Shankar, Rashmi and Varhegyi, Eva, The Dynamics of Foreign Bank Ownership: Evidence from Hungary (August 6, 2003). World Bank Policy Research Working Paper No. 3114. Available at SSRN: https://ssrn.com/abstract=636477

Giovanni Majnoni (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-458-7542 (Phone)
202-522-2106 (Fax)

HOME PAGE: http://www.worldbank.org/research/interest/intrstweb.htm

Rashmi Shankar

World Bank ( email )

1818 H Street N.W.
Washington, DC 20433
United States

Eva Varhegyi

Financial Research Ltd, Budapest ( email )

No Address Available

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