Are foreign banks more profitable than domestic banks? Home- and host-country effects of banking market structure, governance, and supervision

作者：Chen, Sheng Hung^*; Liao, Chien Chang

来源：Journal of Banking & Finance, 2011, 35(4): 819-839.

DOI：10.1016/j.jbankfin.2010.11.006

• Bank profitability
• Foreign bank
• Banking competition
• Panzar and Rosse H
• Governance
• Country risk
• Regulatory supervision

Using both bank- and country-level data on banking sectors from 70 countries over the period 1992-2006, this paper empirically investigates the joint home- and host-country effects of banking market structure, macroeconomic condition, governance, and changes in bank supervision on foreign bank margins. We find that foreign banks are more profitable than domestic banks when they operate in a host country whose banking sector is less competitive and when the parent bank in the home country is highly profitable. Moreover, when foreign banks operate in a host country with lower growth rates of GDP, higher interest and inflation rates, and more stringent regulatory compliance with Basel risk weights, their margins increase. Specifically, changes in bank supervision of a parent bank's ownership restrictiveness in the home country significantly increases foreign bank margins, while supervisory changes in regulatory compliance with Basel risk weights in the host country enhances foreign bank margins.

• 出版日期2011-4
• 单位南华大学