Author
Listed:
- Christopher A. Hartwell
- Bryane Michael
Abstract
Purpose - – The penetration of foreign banks into emerging markets has been linked with financial sector deepening and expansion of credit. However, there is little research into the interaction of financial sector institutions with broader transition and development dynamics. The purpose of this paper is to examine if the presence of foreign financial institutions helped to shape a better business environment over the long-run in emerging markets. Design/methodology/approach - – The authors use aggregate, country-level annual data for 107 developed and emerging market countries over a shifting 30-year time span (1983-2012). The authors use Prais-Winsten and System-GMM techniques on stationary variables to highlight linkages between foreign banks and the overall business environment. Where data were found to be non-stationary, the authors applied panel cointegration approaches, including Granger Causality and full-modified OLS, to research the same relationship. Findings - – The results show that foreign bank entry in emerging markets has had a positive effect in the broader business environment, with the biggest effects on legal protection, competitiveness, and time to import/export. Research limitations/implications - – This paper does not consider the broader effects of foreign bank entry on competition within emerging markets, an area that the authors are considering as fruitful for future research. Originality/value - – The issue of financial sector impact on broader business environment issues has not been studied in the extant literature. Moreover, this study makes an important contribution for policymakers who are grappling with issues related to financial sector regulation in the post-global financial crisis world.
Suggested Citation
Christopher A. Hartwell & Bryane Michael, 2015.
"A helping hand: examining the effect of foreign banks on the business environment,"
International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 10(4), pages 875-895, September.
Handle:
RePEc:eme:ijoemp:ijoem-03-2014-0034
DOI: 10.1108/IJoEM-03-2014-0034
Download full text from publisher
As the access to this document is restricted, you may want to search for a different version of it.
Corrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijoemp:ijoem-03-2014-0034. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
We have no bibliographic references for this item. You can help adding them by using this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.