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The effects of increased foreign ownership on Korean domestic banks

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  • The effects of increased foreign ownership on Korean domestic banks
  • Yi, Insill; Miller, ∙ Stephen M.; ∙ Jeon, Yongil
  • The Association of Korean Economic Studies


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Title The effects of increased foreign ownership on Korean domestic banks
Similar Titles
Material Type Articles
Author(English)

Yi, Insill; Miller, ∙ Stephen M.; ∙ Jeon, Yongil

Publisher

[Seoul]:The Association of Korean Economic Studies

Date 2009-04
Journal Title; Vol./Issue The Journal of the Korean Economy:vol. 10(no. 1)
Pages 24
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Holding AKES

Abstract

We use annual banking panel data from 2001 to 2006 to examine the effects of foreign ownership on Korean domestic banks’ performance in four areas of loan market behavior, management efficiency, transmission of advanced financial techniques, and profitability. Several conclusions emerge. First, increases in foreign bank ownership do not directly increase loans to large-sized firms. Also, no significant evidence suggests that increased foreign ownership of domestic banks reduces loans to small- and medium-sized firms. Consumer loans significantly increase with the level of foreign ownership. Second, the increase in foreign ownership does not produce statistically significant cost saving, such as more layoffs and shutdowns of branches. Third, we do not find any statistically significant relationship between non-interest income and foreign ownership. (The rest omitted)