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Foreign bank penetration of newly opened markets in the Nordic Countries

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Author Info
Engwall, Lars (Uppsala University)
Marquardt, Rolf (Swedish Bankers Association)
Pedersen, Torben (Department of International Economics and Management, Copenhagen Business School)
Tschoegl, Adrian E. (University of Pennsylvania)

Additional information is available for the following registered author(s):

Abstract

The opening to foreign banks in Denmark, Finland, Norway and Sweden provides us with

an opportunity to study entry, survival and success in a situation where the entrants were

subject to the liability of foreignness but not the liability of newness. We find that despite

low survival rates, on balance the entrants gained market share (in terms of the assets of

the banking system) over time. Our results for the role of time, links to the home market

and problems facing domestic competitors were strongly in accordance with expectations

in the cases of Denmark, mixed or indeterminate for Finland and Norway, and strongly

opposite in the case of Sweden. Lastly, our results are broadly consistent with the Stiglitz-Weiss

argument that new entrants, in this case foreign banks, buy entry by accepting

worse lending risks.

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Publisher Info
Paper provided by Copenhagen Business School, Department of International Economics and Management in its series Working Papers with number 2-1999.

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Length: 38 pages
Date of creation: 01 Mar 1999
Date of revision:
Handle: RePEc:hhb:cbsint:1999-002

Contact details of provider:
Postal: Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, DK-2000 Frederiksberg, Denmark
Phone: +45 3815 2515
Fax: +45 3815 2500
Web page: http://www.cbs.dk/departments/int/
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Related research
Keywords: entry foreign banks Nordic countries

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Yafeh, Y. & Yosha, O., 1995. "The Strategic Use of Relationship Banking," Papers 38-95, Tel Aviv.
  2. Jacobsen, Siv Fagerland & Tschoegl, Adrian E, 1999. "The Norwegian Banks in the Nordic Consortia: A Case of International Strategic Alliances in Banking," Industrial and Corporate Change, Oxford University Press, vol. 8(1), pages 137-65, March.
    Other versions:
  3. Ursacki, Terry & Vertinsky, Ilan, 1992. "Choice of entry timing and scale by foreign banks in Japan and Korea," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 405-421, April. [Downloadable!] (restricted)
  4. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn. [Downloadable!] (restricted)
  5. Jaffee, Dwight & Stiglitz, Joseph, 1990. "Credit rationing," Handbook of Monetary Economics, in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 2, chapter 16, pages 837-888 Elsevier. [Downloadable!] (restricted)
  6. Heinkel, Robert L. & Levi, Maurice D., 1992. "The structure of international banking," Journal of International Money and Finance, Elsevier, vol. 11(3), pages 251-272, June. [Downloadable!] (restricted)
  7. Baldwin, John R. & Rafiquzzaman, Mohammed, 1995. "Selection versus evolutionary adaptation: Learning and post-entry performance," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 501-522, December. [Downloadable!] (restricted)
  8. Sherrill Shaffer, 1994. "Market conduct and aggregate excess capacity in banking: a cross- country comparison," Working Papers 93-28/R, Federal Reserve Bank of Philadelphia.
  9. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March. [Downloadable!] (restricted)
  10. Baldwin, John R. & Raffiquzzaman, Mohammed, 1995. "Selection Versus Evolutionary Adaptation: Learning and Post-entry Performance," Analytical Studies Branch Research Paper Series 1994072e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  11. DeYoung, Robert & Nolle, Daniel E, 1996. "Foreign-Owned Banks in the United States: Earning Market Share or Buying It?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 622-36, November. [Downloadable!] (restricted)
  12. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hans Degryse & Steven Ongena, 2002. "Bank-Firm Relationships and International Banking Markets," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 9(3), pages 401-417, November. [Downloadable!] (restricted)
  2. Adrian E. Tschoegl, 2004. "Financial Crises and the Presence of Foreign Banks," International Finance 0405016, EconWPA. [Downloadable!]
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