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| Author: | Guimaraes, P. |
| Title: | How Does Foreign Entry Affect the Domestic Banking Market? The Brazilian Case |
| Journal: | Latin American Business Review
2002 : VOL. 3:4, p. 121-139 |
| Index terms: | BANKING BANKS FOREIGN BANKS BRAZIL |
| Language: | eng |
| Abstract: | Using bank level data for Brazil in the 1995-2001 period, this paper examines the extent of foreign ownership in the domestic banking market. It also separates and analyses the domestic banking system as to private and state- owned institutions, given the almost 50% market share of state-owned banks in Brazil by the deposit criteria. The net interest margins, overhead, taxes paid, and profitability of foreign and domestic banks are compared with domestic banks achieving higher profits than foreign banks, which contradicts the empirical evidence in the literature. Also, further estimation results suggest that an increase in the share of foreign banks leads to higher profitability of domestic banks, which is opposed to the literature. |
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