The effect of foreign bank presence on firm entry and exit in transition economies

Arbeitspapier

This study investigates the impact of foreign bank penetration on firm entry in Central and Eastern Europe. Acquisition of domestic banks by foreign investors has lowered rates of firm creation, decreased the average size of entrants, and increased firm exit in industries with greater informational opacity, while entry of greenfield foreign banks appears to have spurred firm creation and exit. We modify the view in earlier studies that informational opacity equates with firm size, defining opacity in terms of technological characteristics for a given industry. We find the economic significance of foreign bank entry is larger for opaque industries than industries with large shares of small firms. The study provides evidence of increased credit constraints for start-ups in Central and Eastern Europe, which is consistent with the theoretical proposition that the presence of foreign banks exacerbates informational asymmetries.

Angaben zum Objekt

• ISBN: 978-952-462-706-1
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: BOFIT Discussion Papers ; No. 11/2011

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Money Supply; Credit; Money Multipliers ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; New Firms; Startups
• Thema: Entrepreneurship ; Foreign bank entry ; Asymmetric information ; Credit constraints

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Havrylchyk, Olena
• Ereignis: Veröffentlichung
• (wer): Bank of Finland, Institute for Economies in Transition (BOFIT)
• (wo): Helsinki
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/212699
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ