APPENDIX
Table7: Multinational banks involved in the sample
Name of multinational bank Home country Host country ABN AMRO
BNP Paribas Bank Sarasin
HSBC Private Bank Deutsch Bank
Bank of Tokyo
AB Bankas Hansabankas Banco Santander S.A.
Citibank Peru
BBVA Banco Continental Bank of America Asia Ltd.
HSBC Asian Pacific BBVA Bancomer S.A.
BankBoston SA Standard bank Plc.
Royal bank of Canada Banco Internacional Banco Santander Banco Popular BANIF SGPS SA Corp Banca Banco Provincial Bank of Montreal Rabo bank
Banco GNB Sudameris Banco Popular Fortis bank N.V.
GE Artesia Bank Nordea Bank
Citibank Berhad Credit Suisse Singapore Ltd.
ING Asia private Bank Bank of Nova Scotia Bank Calyon
HSBC Bank Brasil SA PT Bank Resona Perdania HVB Bank
HSBC USA Inc.
China Trust Bank
Alfred Berg Holding
Netherlands France Netherlands United Kingdom Germany Japan
Sweden Spain
United States Spain United States United Kingdom Spain
United States South Africa Canada Mexico Spain Spain Spain Chile Spain Canada Netherlands Brazil Spain
Belgium/Netherlands United States
Sweden
United States Switzerland Netherlands Canada France
United Kingdom Japan
Luxembourg United Kingdom Taiwan
Netherlands
Switzerland Switzerland Switzerland Luxembourg Luxembourg Luxembourg Lithuania Uruguay Peru Peru
Hong Kong Hong Kong Mexico Mexico UK UK Chile Chile Portugal Portugal Venezuela Venezuela Ireland Ireland Colombia Colombia Netherlands Netherlands Finland Malaysia Singapore Singapore Singapore Brazil Brazil Indonesia Czech Republic USA
USA
Sweden
Table1: Overview of empirical studies
Adjusted R squared 0. 92 0.27
Coefficient (1) 7.9330** (9.58) (2) 0.0947 (2.92) (3) –0.4315 (-4.25) (4) –13.493 (-3.82) (1) 0.9677** (0.1142) (2) 0.2306 (0.1502) (3) 414.11* (189.02)
No of Observation 10 or 8 countries 30 countries
Independent Variable (1) US direct investment position (2) Gross National Product (3) Import plus export (4) Rate of return on branch assets (1) Change in US direct investment in host country in USD millions (2) The amount of manufacturing production (indicator of local banking market opportunity) (3) Bank Open
Dependent Variable (1) Branch total assets (2) Branch net income Change in U.S. branch assets per year in USD millions
Area Asia and Europe Europe, Latin America and Asia
Period 1974- 1975 1976- 1982
Subject US banks oversea operation U.S. bank operations in 30 countries, 1976- 1982.
Author Fieleke (1977) N igh, Cho, an d Krishnan (1986)
Adjusted R squared 0.93 0.94
Coefficient (1) 0.59*** (3.58) (2) 0.73*** (2.65) (3) –0.05*** (3.4) (4) –106.95 (0.15) (1) 0.263*** (2.01) (2) 162.16*** (1.95) (3) 3.94* (4) –2.95* (5) –0.396
No of Observation 23 less developed countries 184 samples Foreign banks in 26 US states
Independent Variable (1) USFDI (2) GNP per capital host country (development) (3) Commercial bank loans in host country (market size) (4) Regulation of bank in host country (1) Number of foreign corporations headquartered in each states (2) Number of US multinationals (3) Import (4) Export (5) Income of state
Dependent Variable U.S. branch assets in host country
(1)Foreign bank assets
(2)Foreign bank deposits
Area Less Developed Countries United States
Period 1975- 1982 1984
Subject U.S. banks in 23 Less Developed Countries Foreign banks in the U.S. in 1984, state level data
Author Sabi (1988) Goldberg, Helsley and Levi (1989a)
Adjusted R squared N/A 0.71
Coefficient (1) No significant contribution, coefficient negative (2) No significant contribution, coefficient positive (1) 3.854* (23.073) (2) 2915.633* (2.349) (3) –0.011* (-2.390)
No of Observation 68 quarterly data 240
Independent Variable FDI into the United States (1) FDI from US (2) Regulation on US bank foreign expansion (3) Deposits on domestic banks (proxy of size of domestic banks)
(1) Total assets of foreign branches and agencies (2) Commercial loans of foreign branches, agencies and international banking facilities (IBFs)
Dependent Variable Assets of foreign branches
Area United States Latin America, Caribbea n, US territory, Europe, Africa, Middle East, Asia.
Period 1974- 1989 1972- 1985
Foreign banks in the
Subject U.S. U.S. banks in 22 countries, 1972-1985 Aggregate annual data
Author Budzeika (1991) Goldberg and Johnson (1990)
Adjusted R squared 0.88 N/A 0.72
Coefficient (1) –0.1179 (-1.39) (2) 0.60652* (2.58) (3) 1.2176* (3.59) Proxy positive and significant -0.739 (-0.58)
No of Observation 119 Foreign banks in 26 US states 157
(1) Home country investment in Malaysia (2) Home country bank market size
Independent Variable (3) Two-way trade FDI from home country into Australia by year FDI into the UK
Dependent Number of branches and offices from each country Number of banks from each home country
Variable Log of total assets
Malaysia
Area Australia United Kingdom
Period 1980- 1990 1988- 1992 1980- 1989
Subject Foreign banks in Malaysia, 1980-1990, across 11 countries Foreign banks and foreign merchant banks in Australia Foreign banks in London
Author Marashdeh (1994) Wright and Liesch (1994) Fisher and Molyneux (1996)
Adjusted R squared 0.72 0.455 (Poland) 0.333 (Hungry) 0.343 (Czech Republic)
Coefficient (1) 0.00005 (1.316) (2) 0.78122** (6.668) (3) –0.2888** (2.639) (4) –0.12146 (-1.551) (5) 0.00199 (0.1339) (1) Survey following clients important for Poland and Czech republic, but not for Hungry (2) Positive and significant for Poland, positive and not significant for Hungry and Czech Republic
No of Observation 55 70
(1) Current value of
Independent Variable FDI flow into Australia (2) Parent size (3) Net interest margin home (4) NIM host (5) Time in host (1) Stock of FDI in host country (2) Size of bank
Dependent Variable Assets of foreign banks in Australian dollars (1) Survey of 70 banks in Poland Hungary and Czech Republic in 1996 (2) 0 if banks not present, 1 if bank present
Australia
Area Central and Eastern Europe
Period 1987- 1993 1996
Foreign banks in Australia
Subject Foreign banks in Poland, Hungary and the Czech Republic
Author Williams (1998) Konopielko (1999)
Adjusted R squared 0.102
Coefficient 0.6***
No of Observation 13098 Banking sector competition in the area where the bank presents
Independent Variable Bank Orientation (1 if bank considers itself as main bank of the firm and if the length of relationship exceeds 1 years, and 0 otherwise)
Dependent Variable Belgium
Area Period 2003 Bank competition and orientation
Subject Degryse and Ongena
Author (2003)
Table3: Descriptive statistics of variables
Unite N Minimum Maximum Mean Std. Deviation
ASSET Million $ 264 64.11 334589.52 22458.3113 52890.82621 SIZEPARENT Million $ 266 1750.41 1221426.24 394896.7703 281320.95405
YEARHOST Year 266 1.00 162.00 39.7368 37.83408
NPM 266 -2.04 .70 .1726 .23603
EFFICIENCY 266 4.40 303.70 62.1033 31.03676
FDIFLOW Million $ 265 -7019.64 108566.00 3373.7828 10057.90651 GDPHOST Million $ 266 19713.28 10908000.00 774195.2129 2136353.01793 SIZESECTOR Million $ 266 1547.92 5720153.85 477939.8157 1098924.02290 LOCALOPPORT
UNITY 266 .40 27.71 4.1296 4.70682
COMHOME 266 .12 1.00 .8190 .17790
BANKOPEN 266 .02 .94 .3314 .25627
FDISTOCK Million $ 266 2.31 277613.00 20597.0090 38821.67527
REGULATION 266 .18 .79 .3957 .13607
Valid N (listwise) 263
Table4: Correlation among key variables
1 2 3 4 5 6 7 8 9 10 11 12
1 Asset 2 Size Parent 3 Year host 4 NPM 5 Efficiency 6 FDI flow 7 GDP host 8 Size sector
9 Local Opportunity 10 Comhome 11 Bank Open 12 FDI stock 13 Regulation
.426**
-.132*
.399**
-.291**
.346**
.324**
.342**
-.271**
-.391**
.004 .527**
-.195**
.014 -.092 -.066 .442**
.057 .146*
-.233**
-.575**
.064 .558**
-.234**
-.052 -.101 -.233**
-.206**
-.178**
.105
.161**
.116 -.016 -.080
-.077 -.089 .119 .039 .089
.097 .097 .088 -.079
-.019 .095 -.004 .097
.076 -.116 -.055 .121*
.248**
.285**
-.281**
-.348**
-.071 .611**
.063
.903**
-.536**
-.260**
-.535**
.488**
.066
-.782**
-.389**
-.630**
.501**
.086
.521**
.644**
-.425**
-.150*
.205**
-.504**
.123*
-.207**
-.403** -.075
* = Correlation is significant at the 0.05 level (two-tailed)
** = Correlation is significant at the 0.01 level (two-tailed)
Table5: Main results of regression
Dependent Variables: Asset size Control
Variables Constant Sizeparent Yearhost NPM Efficiency Size sector
Independent Variables (1) FDI stock (2) GDP host
(3) Local Opportunity
Moderate Variables (4) Regulation
(5) Bank Openness (6) Comhome Interaction (4)*(1) (4)*(2) (4)*(3) (5)*(1) (5)*(2) (5)*(3) (6)*(1) F-statistics
Model1
-15456.08**
(-5.989) 0.021**
(6.049) 795.636**
(9.985) -347.141 (-0.306) -14.547 (-1.596) -0.003483**
(-3.481)
75.387**
Model2
-6160.548*
(-2.555) 0.015**
(4.628) 530.986**
(6.994) 182.074 (0.192) -4.610 (-0.481) -0.0155**
(-4.759)
0.088*
(2.385) 0.00913**
(3.570) -90.414**
(-3.025)
79.415**
Model3
3467.167 (1.124) 0.015**
(4.787) 406.117**
(4.871) 324.116 (0.364) -15.172 (-1.647) -0.0015 (-0.353)
0.180**
(2.846) 3.72 (0.011) -241.926*
(-2.388)
-4399.756*
(-2.402)
-0.239 (-1.222) -0.011**
(-2.897) 593.502 (1.783)
74.400**
Model4
-11201.33**
(-4.187) 0.020**
(6.213) 342.940**
(4.316) 1426.487 (1.530) -11.101 (-1.137) -0.008*
(-2.149)
0.314**
(4.726) 0.004 (1.468) 805.563*
(2.169)
24602.14**
(7.198)
-0.379**
(-5.229) -0.0087**
(-3.816) -1165.724**
(-3.057)
84.720**
Model5
-10606.08*
(-2.479) 0.0152**
(4.351) 555.227**
(7.081) 18.447 (0.020) -3.191 (-0.322) -0.017**
(-4.870)
0.097 (0.817) 0.010**
(3.708) -86.205*
(-2.433)
4469.534 (1.210)
-0.025 (-0.161) 79.524**
Model6
3404.408 (0.620) 0.015*
(2.276) 463.28**
(3.204) 247.145 (0.112) -13.192 (-0.698) -0.025**
(-8.921)
-0.021 (-0.773) 0.013**
(6.209) -63.281 (-1.529)
169.844**
Model7
-12065.97**
(-3.780) 0.013**
(3.386) 533.808**
(5.151) 1472.725 (1.204) -35.269**
(-2.652) 0.0042 (0.525)
0.307**
(5.140) -0.0038 (-0.654) 1889.479**
(3.768)
49.445**
0.919 0.979
0.944 0.950
0.943 0.941
0.933 R-squared
0.901 0.973
0.932 0.939
0.931 0.930
0.921 Adjusted R-
squared
White
Heteroskedastic ity test
3.146**
19.247**
1.673*
2.445**
1.841*
1.843*
2.031*
-F statistics
(43117) (1688)
(20259) (82197)
(24255) (16263)
(10269)
86.333**
81.663**
32.042*
141.227**
41.357*
28.226*
19.66*
-Chi-Square
(43) (16)
(20) (82)
(24) (16)
(10)
1.500 1.227
1.261 1.389
1.251 1.269
1.242 Durbin Watson
statistics
Notes: Standardized Beta reported (values between brackets are t-values) P-value<0.05; ** P-value<0.01
N=280, No Cross section=40, No years=7 for Model1-5;
N=105, No Cross section=15, No years=7 for Model6;
N=161, No Cross section=23, No years=7 for Model7.
Table8: Data Sources for Variables measurement
Variable Measurement Dataset Source
World bank Datasets Bank Regulation
and Supervision Survey (Barth etc., al.) Weighted average of
regulation on foreign bank entry and foreign bank ownership
Regulation on
foreign banks (WPS 2588)
( Re gulation
it)
World Bank Policy Cull, Peria and
Soledad dataset (2007)
% 100
*
sec tor banking
k foreignban
