Determinants of Foreign Banks Entry
It is argued that foreign banks entry can improve the process of development by technology transfer and access to new international funds. This paper investigates factors affecting foreign banks entry. The theoretical model is based on Markowitz portfolio model, in which a bank decides to invest on...
| Published in: | فصلنامه پژوهشهای اقتصادی ایران |
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| Main Authors: | , , |
| Format: | Article |
| Language: | Persian |
| Published: |
Allameh Tabataba'i University Press
2010-09-01
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| Subjects: | |
| Online Access: | https://ijer.atu.ac.ir/article_3386_8289d6c564bdf9ca7239d69fac2d5f29.pdf |
| Summary: | It is argued that foreign banks entry can improve the process of development by technology transfer and access to new international funds. This paper investigates factors affecting foreign banks entry. The theoretical model is based on Markowitz portfolio model, in which a bank decides to invest on “portfolio of countries” according to their potential country risk and return. To test various hypotheses, we construct a panel data model for 10 year across 30 countries. The results confirm the “follow up” theory: banks follow their clients to meet their needs in another country. The policy implication for authorities is that in order to attract foreign banks, they may consider participation of foreign companies in other industries. Banks are expected to automatically follow their clients and open up new branches at that country. |
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| ISSN: | 1726-0728 2476-6445 |