Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance

By Allen N. Berger, Robert DeYoung, Hesna Genay, Gregory F. Udell. 2000

907 citations recorded by the source corpus.

We address the causes, consequences, and implications of the cross-border consolidation of financial institutions by reviewing several hundred studies, providing comparative international data, and estimating cross-border banking efficiency in France, Germany, Spain, the U.K., and the U.S. during the 1990s. We find that, on average, domestic banks have higher profit efficiency than foreign banks. However, banks from at least one country (the U.S.) appear to operate with relatively high efficiency both at home and abroad. If these results continue to hold, they do not preclude successful international expansion by some financial firms, but they do suggest limits to global consolidation.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/d1de3e66cb211c1eab09297fe95119fd12b6800f

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Citations in the corpus

Privatization, foreign bank entry and bank efficiency in Croatia: a Fourier-flexible function stochastic cost frontier analysis (2006, background): “Indeed, Berger et al. (2000) note that single-country studies ‘‘avoid the econometric problem of controlling for the environmental differences across nations, since all of the institutions studied face essentially the same environmental conditions’’.”
Evolution of bank efficiency in Brazil: A DEA approach (2010, background): “Berger et al. (2000) develop two main hypotheses to explain differences in the performance between foreign and domestic banks, the home field advantage hypothesis and the global advantage hypothesis.”
How Important are Foreign Banks in the Financial Development of European Transition Countries? (2004, background): “In contrast, Berger et al. (2000) and DeYoung and Nolle (1996) find that foreign banks are less efficient than host-nation banks in developed nations.”
Performance and Financial Ratios of Commercial Banks in Malaysia and China (2010, neutral): “Recent studies on bank efficiency can be found in Berger and Humphrey (1997), Berger and Mester (1997), and Berger et al. (2000).”