Cull, RobertMartínez Pería, María Soledad2012-06-052012-06-052007-02https://hdl.handle.net/10986/7133This paper describes the recent trends in foreign bank ownership in developing countries, summarizes the existing evidence on the causes and implications of foreign bank presence, and reexamines the link between banking crises and foreign bank participation. Using data on the share of banking sector assets held by foreign banks in over 100 developing countries during 1995-2002, the results show that countries that experienced a banking crisis tended to have higher levels of foreign bank participation than those that did not. Furthermore, panel regressions indicate that foreign participation increased as a result of crises rather than prior to them. However, post-crisis increases in foreign participation did not coincide with increased credit to the private sector, perhaps because in many cases foreign banks acquired distressed banks.CC BY 3.0 IGOADMINISTRATIVE COSTSASSET HOLDINGSAVERAGE VALUESBANK ACCOUNTINGBANK ACQUISITIONSBANK ASSETSBANK FOR INTERNATIONAL SETTLEMENTSBANK MERGERSBANK OF GREECEBANKING CRISESBANKING CRISISBANKING SECTORBANKING SYSTEMBANKING SYSTEMSBUDGET DEFICITBUDGET DEFICITSCAPITAL FLOWSCENTRAL ASIANCOMMERCIAL CODECREDIT MARKETSCROSS-BORDERCROSS-COUNTRY EVIDENCEDEGREE OF COMPETITIONDEPOSIT INSURANCEDISTRESSED BANKSECONOMIC GROWTHECONOMIES OF SCALEEFFICIENCY GAINSEFFICIENCY IMPROVEMENTSEMERGING MARKETSEMPIRICAL ANALYSISEMPLOYMENTESTATEEXECUTIVE DIRECTORSFINANCIAL FIRMSFINANCIAL INTEGRATIONFINANCIAL LIBERALIZATIONFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SYSTEMSFOREIGN ASSETFOREIGN ASSETSFOREIGN BANKFOREIGN BANKSFOREIGN COMPETITIONFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTMENTSFOREIGN ENTRYFOREIGN OWNERSHIPFOREIGN PARTICIPATIONGOVERNMENT INTERFERENCEGOVERNMENT OWNERSHIPGOVERNMENT REGULATIONHOST COUNTRIESHOST COUNTRYHOST DEVELOPING COUNTRIESHOST ECONOMIESINFLATIONINSTITUTIONAL DIFFERENCESINSTITUTIONAL ENVIRONMENTINTEREST INCOMEINTEREST RATESINTERNATIONAL BANKSLATIN AMERICANLAWSLIMITEDLIQUIDITYLOCAL MARKETMARKET SEGMENTSMARKET SIZEMIDDLE EASTNATIONAL BANKNORTH AFRICAOPERATING COSTSOPERATING EXPENSESOVERHEAD COSTSPRIVATE BANKSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRIVATIZATIONPRIVATIZATION OF STATEPROFITABILITYPROPERTY RIGHTSPROTECTION OF PRIVATEPROTECTION OF PROPERTYREGULATORY RESTRICTIONSSHAREHOLDINGSMALL BUSINESSESSMALL COMPANIESSMALL FIRMSSUB-SAHARAN AFRICASUBSIDIARIESTRINIDAD AND TOBAGOVOLATILITYWorld Bank10.1596/1813-9450-4128