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dc.contributor.authorPoelhekke, Stevenen_US
dc.date.accessioned2011-06-22en_US
dc.date.accessioned2011-06-29T11:18:02Z-
dc.date.available2011-06-29T11:18:02Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/46387-
dc.description.abstractThis paper investigates the benefits of banks' direct investment in foreign subsidiaries and branches for non-financial multinationals. The paper builds on the literature on international banks which has primarily focused on the implications for host countries, rather than for its international clients, and on the literature on foreign direct investment (FDI), which emphasizes significant costs of investment. Using a new detailed data set of non-stationary sector-level outward FDI, this paper finds that the volume of FDI by home market banks boosts FDI by non-financial firms from the same home market. Domestic and third-country foreign banking provide imperfect substitutes, especially in countries that are corrupt or have weak rule of law. The result rests on banks' FDI in local branches and subsidiaries rather than cross-border lending. These findings are consistent with a role for home market multinational banks in intermediating information asymmetry in opaque foreign markets. The sale of a major international bank to third-country counter parties during the recent crisis may thus result in persistently lower volumes of outward FDI from the bank's home market.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper: Trade Policy 3490en_US
dc.subject.jelF21en_US
dc.subject.jelG21en_US
dc.subject.jelO16en_US
dc.subject.jelC33en_US
dc.subject.ddc330en_US
dc.subject.keywordoutward sector-level FDIen_US
dc.subject.keywordbanksen_US
dc.subject.keywordasymmetric informationen_US
dc.subject.keywordpanel non-stationarityen_US
dc.titleHome bank intermediation of foreign direct investmenten_US
dc.typeWorking Paperen_US
dc.identifier.ppn662656296en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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