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Do Reforms in Transition Economies Affect Foreign Bank Entry?
Author(s) -
Lensink Robert,
Haan Jakob
Publication year - 2002
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/j.1369-412x.2002.00039.x
Subject(s) - affect (linguistics) , politics , economic freedom , transition (genetics) , transition economy , chinese financial system , economic reform , economics , transition countries , monetary economics , financial sector , international economics , business , financial system , market economy , finance , political science , philosophy , linguistics , biochemistry , chemistry , china , law , gene
Using a newly developed database for eight transition economies, this paper examines whether reforms and political freedom are important for foreign bank entry. We provide evidence that foreign bank entry positively responds to reform measures. We also find some support for the importance of political freedom. Our estimates suggest that economic reform affects foreign bank entry by enhancing the efficiency of the financial sector and by stimulating domestic investments.