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Is foreign-bank efficiency in financial centers driven by homecountry characteristics?

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  • Claudia Curi

    ()

  • Paolo Guarda

    ()

  • Ana Lozano-Vivas

    ()

  • Valentin Zelenyuk

    ()

Abstract

This paper investigates the effects of home country banking regulations on the performance of foreign banks in Luxembourg?s financial center. We control for the main regulatory indicators, such as capital requirements, private monitoring, official disciplinary power and restrictions on bank activities, accounting for the regulatory regime applied to foreign banks. We also control for the level of GDP in the home country and its position in the business cycle. The two-stage bootstrap method proposed by Simar and Wilson (2007) is applied to bank panel data covering 1999-2009. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into the choice between establishing a branch or a subsidiary, when developing cross-border activities through financial centers.

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File URL: http://www.bcl.lu/fr/publications/cahiers_etudes/68/BCLWP068.pdf
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Bibliographic Info

Paper provided by Central Bank of Luxembourg in its series BCL working papers with number 68.

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Length: 38 pages
Date of creation: Oct 2011
Date of revision:
Publication status: published as ?Is foreign-bank efficiency in financial centers driven by home or host country characteristics?? Journal of Productivity Analysis, 2013, 40(3): 367-385.
Handle: RePEc:bcl:bclwop:bclwp068

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Web page: http://www.bcl.lu/

Related research

Keywords: Foreign bank efficiency; Home-host country characteristics; Bank regulation; Data Envelopment Analysis; Bootstrap;

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References

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Cited by:
  1. Sara G. Castellanos & Jesus G. Garza-Garcia, 2013. "Competition and Efficiency in the Mexican Banking Sector," Working Papers 1329, BBVA Bank, Economic Research Department.

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