Scandinavian Working Papers in Business Administration
Working Papers,
Copenhagen Business School, Department of International Economics and Management
No 2-1999: Foreign bank penetration of newly opened markets in the Nordic Countries
Lars Engwall, Rolf Marquardt, Torben Pedersen and Adrian E. Tschoegl
Additional contact information
Lars Engwall: Uppsala University, Postal: Department of Business Studies, Uppsala University, S-751 20 Uppsala, Sweden
Rolf Marquardt: Swedish Bankers Association
Torben Pedersen: Department of International Economics and Management, Copenhagen Business School, Postal: Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, 2nd floor , DK-2200 Copenhagen N, Denmark
Adrian E. Tschoegl: University of Pennsylvania, Postal: Department of Management SHDH 2000, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104-6370
Abstract: The opening to foreign banks in Denmark, Finland, Norway and Sweden provides us with an opportunity to study entry, survival and success in a situation where the entrants were subject to the liability of foreignness but not the liability of newness. We find that despite low survival rates, on balance the entrants gained market share (in terms of the assets of the banking system) over time. Our results for the role of time, links to the home market and problems facing domestic competitors were strongly in accordance with expectations in the cases of Denmark, mixed or indeterminate for Finland and Norway, and strongly opposite in the case of Sweden. Lastly, our results are broadly consistent with the Stiglitz-Weiss argument that new entrants, in this case foreign banks, buy entry by accepting worse lending risks.
Keywords: entry; foreign banks; Nordic countries
38 pages, March 1, 1999
Full text files
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