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Size, productivity, and international banking

Listed author(s):
  • Buch, Claudia M.
  • Koch, Cathérine T.
  • Koetter, Michael

Heterogeneity in size and productivity is central to models that explain which manufacturing firms export. This study presents descriptive evidence on similar heterogeneity among international banks as financial services providers. A novel and detailed bank-level data set reveals the volume and mode of international activities for all German banks. Only a few, large banks have a commercial presence abroad, consistent with the size pecking order documented for manufacturing firms. However, the relationship between internationalization and productivity also yields two inconsistencies with recent trade models. First, virtually all banks hold at least some foreign assets, irrespective of size or productivity. Second, some fairly unproductive banks maintain commercial presences abroad.

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File URL: http://www.sciencedirect.com/science/article/pii/S002219961100078X
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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 85 (2011)
Issue (Month): 2 ()
Pages: 329-334

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Handle: RePEc:eee:inecon:v:85:y:2011:i:2:p:329-334
DOI: 10.1016/j.jinteco.2011.07.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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  1. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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