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Will strangers help you enter?: The effect of foreign bank presence on new firm entry

Will strangers help you enter?: The effect of foreign bank presence on new firm entry
Will strangers help you enter?: The effect of foreign bank presence on new firm entry
We examine the effect of foreign bank presence on new firm entry in 83 economies over the 2005-2013 period. The empirical findings show that foreign bank presence exerts a positive and significant effect on firm entry. This effect subdues in countries with strong creditor rights, while it strengthens in economies with high depth of credit information sharing. In further analysis, we find that the type of credit information sharing provider matters. The positive effect of foreign bank presence on firm entry strengthens in the presence of a private credit bureau, whereas it subdues in the presence of a public credit registry. Finally, we find some evidence that cultural and information sharing distance between home and host economies weakens the positive effect of foreign bank presence on firm entry. In terms of policy, attracting foreign banks while strengthening credit information sharing through private credit bureaus could benefit entrepreneurship in host economies.
foreign banks, firm entry, creditor rights , information sharing
0920-8550
1-38
Bermpei, Theodora
9549be8f-7acb-4f52-a237-3a093b9bb584
Kalyvas, Nikolaos
b90c20b2-9fd4-4d5d-a123-34a193e1ca1d
Neri, Lorenzo
d8013b82-f2eb-410a-9e90-00cc81570ba6
Russo, Antonella
e02f0af9-57d7-4203-8cdc-847bd2e4a811
Bermpei, Theodora
9549be8f-7acb-4f52-a237-3a093b9bb584
Kalyvas, Nikolaos
b90c20b2-9fd4-4d5d-a123-34a193e1ca1d
Neri, Lorenzo
d8013b82-f2eb-410a-9e90-00cc81570ba6
Russo, Antonella
e02f0af9-57d7-4203-8cdc-847bd2e4a811

Bermpei, Theodora, Kalyvas, Nikolaos, Neri, Lorenzo and Russo, Antonella (2018) Will strangers help you enter?: The effect of foreign bank presence on new firm entry. Journal of Financial Services Research, 1-38. (doi:10.1007/s10693-017-0286-1).

Record type: Article

Abstract

We examine the effect of foreign bank presence on new firm entry in 83 economies over the 2005-2013 period. The empirical findings show that foreign bank presence exerts a positive and significant effect on firm entry. This effect subdues in countries with strong creditor rights, while it strengthens in economies with high depth of credit information sharing. In further analysis, we find that the type of credit information sharing provider matters. The positive effect of foreign bank presence on firm entry strengthens in the presence of a private credit bureau, whereas it subdues in the presence of a public credit registry. Finally, we find some evidence that cultural and information sharing distance between home and host economies weakens the positive effect of foreign bank presence on firm entry. In terms of policy, attracting foreign banks while strengthening credit information sharing through private credit bureaus could benefit entrepreneurship in host economies.

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Accepted/In Press date: 27 December 2017
e-pub ahead of print date: 8 February 2018
Keywords: foreign banks, firm entry, creditor rights , information sharing

Identifiers

Local EPrints ID: 417590
URI: https://eprints.soton.ac.uk/id/eprint/417590
ISSN: 0920-8550
PURE UUID: 0753e8e7-51e4-4ce8-972c-0b001c7d87a4

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Date deposited: 06 Feb 2018 17:30
Last modified: 17 Mar 2018 17:30

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Contributors

Author: Theodora Bermpei
Author: Lorenzo Neri
Author: Antonella Russo

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