@techreport{Weller1999Financial,
abstract = {Part of the Polish transformation process has been an opening of the domestic financial market
to foreign entrants. While the number of MNBs rises from zero to fifteen within six years, the
ratio of bank credit to private and public enterprises relative to GDP decreases continuously after
1991. In this paper, I develop an argument as to why these two trends may be connected. Further,
using monthly data provided by the weekly Polish publication Gazeta Bankowa, by the National
Bank of Poland, the Central Statistical Office, the BIS, and the IMF, I test the hypothesis that
more MNB entry may lead to a declining credit supply during the early stages of the transition
process. Multivariate regression results indicate that more MNB entry results in a lower credit
supply by Polish banks during the early transition phase. This result holds regardless of the
measurement of international financial competition, and regardless of a bank's history, and it is
only partially affected by a bank's location. More importantly, the overall impact of increased
international financial competition on the credit supply of Polish banks is strong enough to lower
the total credit supply in the Polish economy. Since an earlier study has found that Polish
industries operate under hard budget constraints and are finance constrained during the early
stages of the transition process, a reduction in the credit supply has adverse effects on business
investments (Cornelli, Portes, and Schaffer, 1996; Weller, 1999).},
address = {Bonn},
author = {Christian E. Weller},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F36; O52; P23; P33; P34; 330; Multinational banks; credit supply; financial liberalization; transition economy; Poland; Kapitalmarktliberalisierung; Internationale Bank; Kreditmarkt; Internationaler Wettbewerb; Kreditrationierung},
language = {eng},
number = {B 10-1999},
publisher = {ZEI},
title = {Financial liberalization, multinational banks and credit supply: The case of Poland},
type = {ZEI working paper},
url = {http://hdl.handle.net/10419/39501},
year = {1999}
}
