@techreport{Lipponer2004Clustering,
abstract = {The presence of other firms in a foreign market can have a double-edged effect on the
profitability of new entrants. Firstly, a larger presence of other firms implies more
competition and thus lowers the earnings prospects of new entrants. Secondly, there
might be positive spill-over effects between the activities of new and old entrants,
which can lead to clustering effects. Such clustering of firms in foreign markets has
been documented in the empirical literature on foreign direct investment (FDI) of nonfinancial
firms, but little evidence is available for banks. This paper analyses whether
banks have a tendency to cluster abroad and whether smaller banks in particular invest
in markets where other banks are already present. We use firm-level evidence on the
foreign direct investments of German banks for the period 1997-2000 to test this
hypothesis. Our results suggest that German banks are indeed more active in markets in
which other German banks are already present. However, once we control for countryfixed
effects, the negative competition effect dominates.},
author = {Alexander Lipponer and Claudia M. Buch},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F21; F0; 330; international banking; clustering; foreign direct investment; Bank; Direktinvestition; Deutsch; Regionale Konzentration; Sch\"{a}tzung; Deutschland},
language = {eng},
number = {2004,06},
title = {Clustering or competition? The foreign investment behaviour of German banks},
type = {Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank},
url = {http://hdl.handle.net/10419/19473},
year = {2004}
}
