Foreign Bank Entry: Experience, Implications for Developing Economies, and Agenda for Further Research

Posted: 29 Feb 2008

See all articles by George R. G. Clarke

George R. G. Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business

Robert Cull

World Bank - Development Research Group (DECRG)

Maria Soledad Martinez Peria

International Monetary Fund (IMF)

Susana M. Sanchez

World Bank - Development Research Group (DECRG)

Abstract

In recent years foreign banks have expanded their presence significantly in several developing economies. In Argentina and Chile in Latin America and in the Czech Republic, Hungary, and Poland in Eastern Europe, foreign-controlled banks now hold more than half of total banking assets. In other regions the trend is similar, though foreign bank entry has been slower. Despite the growing number of countries embracing foreign bank entry, important questions are still being debated: What draws foreign banks to a country? Which banks expand abroad? What do foreign banks do once they arrive? How do foreign banks' mode of entry and organizational form affect their behavior? This article summarizes current knowledge on these issues. Because the existing literature focuses heavily on developed economies, it also puts forth an agenda for further study of the causes and effects of foreign bank entry in developing economies.

Suggested Citation

Clarke, George and Cull, Robert and Martinez Peria, Maria Soledad and Sanchez, Susana M., Foreign Bank Entry: Experience, Implications for Developing Economies, and Agenda for Further Research. World Bank Research Observer, Vol. 18, No. 1, pp. 25-59, Spring 2003. Available at SSRN: https://ssrn.com/abstract=873715

George Clarke (Contact Author)

Texas A&M International University - A.R. Sanchez Jr., School of Business ( email )

5201 University Blvd.
Laredo, TX 78041-1900
United States

Robert Cull

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-6365 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/rcull

Maria Soledad Martinez Peria

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Susana M. Sanchez

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
(202)473-1856 (Phone)

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