Bank efficiency and foreign ownership: Do good institutions matter?

B.W. Lensink, A.J. Meesters, I. Naaborg

Onderzoeksoutput: ArticleAcademicpeer review

249 Citaten (Scopus)


This paper contributes to the literature on foreign ownership and bank efficiency by examining whether the efficiency of foreign banks depends on the institutional quality of the host country and on institutional differences between the home and host country. Using stochastic frontier analysis for a sample of 2095 commercial banks in 105 countries for the years 1998-2003, we find that foreign ownership negatively affects bank efficiency. However, in countries with good governance this negative effect is less pronounced. We also find that higher quality of the institutions in the home country and higher similarity between home and host country institutional quality reduce foreign bank inefficiency. (C) 2007 Elsevier B.V. All rights reserved.

Originele taal-2English
Pagina's (van-tot)834-844
Aantal pagina's11
TijdschriftJournal of Banking & Finance
Nummer van het tijdschrift5
StatusPublished - mei-2008

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