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Foreign bank participation and outreach: Evidence from Mexico

  • Beck, Thorsten
  • Martinez Peria, Maria Soledad

Recently, developing countries have witnessed a sharp increase in foreign bank participation. We examine the impact on banking outreach using newly gathered data for Mexico, where foreign bank participation rose from 2% to 83% of assets during 1997-2005. Country-, bank-, and bank-municipality-level estimations show a decline in the number of deposit and loan accounts. While country- and bank-level estimations indicate an increase in the share of municipalities with bank branches and in the likelihood of bank presence, bank-municipality regressions show that only rich and urban municipalities benefited. Overall, the evidence is consistent with a decline in outreach.

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Article provided by Elsevier in its journal Journal of Financial Intermediation.

Volume (Year): 19 (2010)
Issue (Month): 1 (January)
Pages: 52-73

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Handle: RePEc:eee:jfinin:v:19:y:2010:i:1:p:52-73
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