Working Paper

Are International Banks Different? : Evidence on Bank Performance and Strategy

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Bertay, Ata Can
dc.contributor.author
Demirguc-Kunt, Asli
dc.contributor.author
Huizinga, Harry
dc.date.accessioned
2017-12-21T20:57:48Z
dc.date.available
2017-12-21T20:57:48Z
dc.date.issued
2017-12
dc.date.lastModified
2021-06-08T14:42:47Z
dc.description.abstract
This paper provides evidence on how bank performance and strategies vary with the degree of bank internationalization, using data for 113 countries over 2000-15. The paper investigates whether international banks headquartered in developing countries behave and perform differently from those headquartered in high-income countries. The results show that, compared with domestic banks, international banks have lower valuations and achieve lower returns on equity in general. This suggests that, on average, bank internationalization has progressed beyond the point where it is in the interest of bank shareholders, potentially because of corporate governance failures and too-big-to-fail subsidies that accrue to large and complex banks. In contrast, developing country international banks seem to have benefited from internationalization compared with their high-income counterparts. Furthermore, for international banks headquartered in developing countries, bank internationalization reduces the cyclicality of their domestic credit growth with respect to domestic gross domestic product growth, smoothing local downturns. In contrast, if the international bank is from a high-income country investing in a developing country, its lending is relatively procyclical, which can be destabilizing.
en
dc.identifier
http://documents.worldbank.org/curated/en/908851513693366704/Are-international-banks-different-evidence-on-bank-performance-and-strategy
dc.identifier.uri
http://hdl.handle.net/10986/29078
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 8286
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
BANKING
dc.subject
INTERNATIONALIZATION
dc.subject
SOUTH-SOUTH BANKING
dc.subject
RISK-TAKING
dc.subject
CYCLICALITY
dc.title
Are International Banks Different?
en
dc.title.subtitle
Evidence on Bank Performance and Strategy
en
dc.type
Working Paper
en
okr.crossref.title
Are International Banks Different? Evidence on Bank Performance and Strategy
okr.date.disclosure
2017-12-19
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/908851513693366704/Are-international-banks-different-evidence-on-bank-performance-and-strategy
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-8286
okr.identifier.externaldocumentum
090224b085465077_1_0
okr.identifier.internaldocumentum
29285380
okr.identifier.report
WPS8286
okr.imported
true
en
okr.language.supported
en
okr.pdfurl
http://documents.worldbank.org/curated/en/908851513693366704/pdf/WPS8286.pdf
en
okr.statistics.dr
908851513693366704
okr.topic
Finance and Financial Sector Development :: Banks & Banking Reform
okr.topic
Finance and Financial Sector Development :: Finance and Development
okr.topic
Finance and Financial Sector Development :: International Financial Markets
okr.topic
Governance :: Governance and the Financial Sector
okr.topic
Governance :: Multinational & Corporate Governance
okr.topic
Private Sector Development :: Corporate Governance
okr.topic
Private Sector Development :: Emerging Markets
okr.unit
Finance and Private Sector Development Team, Development Research Group

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