EconStor >
Rheinische Friedrich-Wilhelms-Universität Bonn >
Zentrum für Europäische Integrationsforschung (ZEI), Universität Bonn >
ZEI Working Papers, Zentrum für Europäische Integrationsforschung, Universität Bonn >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/39501
  
Title:Financial liberalization, multinational banks and credit supply: The case of Poland PDF Logo
Authors:Weller, Christian E.
Issue Date:1999
Series/Report no.:ZEI working paper B 10-1999
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).
Subjects:Multinational banks
credit supply
financial liberalization
transition economy
Poland
JEL:F36
O52
P23
P33
P34
Document Type:Working Paper
Appears in Collections:ZEI Working Papers, Zentrum für Europäische Integrationsforschung, Universität Bonn

Files in This Item:
File Description SizeFormat
269552561.pdf262.7 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/39501

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.