Does foreign ownership foster bank performance?
Abstract:We examine the effect of a rise in foreign ownership on banks' interest revenues and profitability using panel data of banks worldwide. We determine the exact yearly foreign ownership for each bank and construct a continuous foreign ownership variable. Estimating with the system generalized methods of moments (GMM) technique we find that a rise in foreign ownership negatively affects bank performance, providing evidence for the home field advantage theory.
Document Type: Research Article
Affiliations: 1: Faculty of Economics, University of Groningen, Groningen AV, The Netherlands,External CREDIT Fellow, University of Nottingham, UK 2: Faculty of Economics, University of Groningen, Groningen AV, The Netherlands
Publication date: July 1, 2007