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Financial Liberalization and Foreign Bank Entry in Emerging and Developing Economies: What Does the Literature Tell Us?

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  • Sasidaran Gopalan

    (HKUST Institute for Emerging Market Studies and HKUST Jockey Club Institute for Advanced Study, Lo Ka Chung Building, Lee Shau Kee Campus, The Hong Kong University of Science and Technology (HKUST), Clear Water Bay, Kowloon, Hong Kong)

Abstract

An important feature of international financial liberalization in several emerging market and developing economies (EMDEs) over the last two decades has been the rising foreign bank participation in their domestic banking systems. While the term financial liberalization has been widely used in literature, it is often not carefully defined. What is the relationship between foreign bank entry and financial liberalization? This paper lays out a simple framework to understand the different components of financial liberalization, its relationship with domestic deregulation as well as foreign bank entry and also surveys the trends and implications of foreign bank entry in EMDEs.

Suggested Citation

  • Sasidaran Gopalan, 2015. "Financial Liberalization and Foreign Bank Entry in Emerging and Developing Economies: What Does the Literature Tell Us?," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 1-25.
    • Handle: RePEc:wsi:jicepx:v:06:y:2015:i:02:n:s1793993315500076
    DOI: 10.1142/S1793993315500076
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign bank entry; financial liberalization; financial development; F21; G00; G21; O16;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G00 - Financial Economics - - General - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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