Financial Liberalization and Foreign Bank Entry on the Domestic Banking Performance in MENA Countries

Hassan, M. Kabir; Sánchez, Benito; Ngene, Geoffrey; Ashraf, Ali

doi:10.1111/j.1467-8268.2012.00318.x

Cited by 32 publications

(19 citation statements)

References 31 publications

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“…In that we use profitability ratios with no interest rates as an ethical condition of Islamic financing is delineated. Our study also differs from that of Hassan, Sanchez and Safa (2013) …”

Section: Reforms and Islamic Banks Performancecontrasting

confidence: 89%

Financial Liberalization, Reforms and Bank Performance: Evidence from Malaysian Islamic Banks

Elryah¹

2014

IOSRJEF

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“…In that we use profitability ratios with no interest rates as an ethical condition of Islamic financing is delineated. Our study also differs from that of Hassan, Sanchez and Safa (2013) …”

Section: Reforms and Islamic Banks Performancecontrasting

confidence: 89%

Financial Liberalization, Reforms and Bank Performance: Evidence from Malaysian Islamic Banks

Elryah¹

2014

IOSRJEF

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“…Therefore, the extent and nature of the foreign banks' entry influence the other bank's risk-taking behavior, but the moderating role of bank competition has not been examined. Some empirical studies suggest that foreign banks' entry might reduce the local banks' risk factor and enhance financial stability by stimulating a spillover of new innovative ideas and better expertise from foreign banks to local banks, encouraging local banks to invest in new technology as well as human capital and enhance their proficiency in the long run (Edison et al 2002;Lensink and Hermes 2004;Hassan et al 2012;Kouretas and Tsoumas 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

Chen

Nazir

Hashmi

et al. 2019

JRFM

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This unique study examines the interactive role of bank competition and foreign bank entry in explaining the risk-taking of banks over the globe. We used cross-country data for the banking sector from 2000 to 2016. Using the pooled regression model and Two-stage Least Squares model (2SLS with Generalized Method of Moments GMM), we document that foreign bank entry decreases the risk-taking behavior of the banks to a certain level and exhibits an inverted U-shaped relation with financial stability. Furthermore, the joint effect of bank competition and foreign bank entry brings financial fragility because host banks tend to make risky investments due to undue competition induced by foreign bank entry. We support the competition–fragility hypothesis when foreign bank entry goes beyond a certain threshold. Our results also suggest that restrictions on bank activities and capital regulation stringency reduce the level of the risk factor. We also applied various robustness tests, which further confirm our mainstream results. Our findings have policy implications for foreign investors and regulatory authorities.

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“…However, a comparison between the role of domestic and foreign banks has not been made yet. (Hassan et al, 2012). Interest rate spreads (lending rates minus deposit rates) have declined in the MENA countries as a result of liberalisation and the increase in competition brought about by the entry of foreign banks (Lee, 2002).…”

Section: Impact Of Foreign Banks' Entry On the Host Nationmentioning

confidence: 99%

The Performance of Banks in the MENA Region During the Global Financial Crisis

Caporale

Lodh²,

Nandy

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Suman LodhMiddlesex University Monomita NandyBrunel University London May 2016 AbstractThis paper examines the impact of the global financial crisis on the banking sector in the Middle East and North Africa (MENA) region, as well as the main determinants of the profitability of both domestic and foreign banks. The empirical findings suggest that during the crisis the former outperformed the latter in that region. As for the determinants of profitability, size does not appear to play a role, whilst the liquidity ratio and net interest revenues seem to have a negative and positive effect respectively; GDP has a positive effect in the case of domestic banks.

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Financial Liberalization and Foreign Bank Entry on the Domestic Banking Performance in MENA Countries

Cited by 32 publications

References 31 publications

Financial Liberalization, Reforms and Bank Performance: Evidence from Malaysian Islamic Banks

Financial Liberalization, Reforms and Bank Performance: Evidence from Malaysian Islamic Banks

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

The Performance of Banks in the MENA Region During the Global Financial Crisis

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