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|dc.contributor.author||Weller, Christian E.||en_US|
|dc.description.abstract||Part of the Polish transformation process has been an opening of the domestic financial marketto foreign entrants. While the number of MNBs rises from zero to fifteen within six years, theratio of bank credit to private and public enterprises relative to GDP decreases continuously after1991. 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 NationalBank of Poland, the Central Statistical Office, the BIS, and the IMF, I test the hypothesis thatmore MNB entry may lead to a declining credit supply during the early stages of the transitionprocess. Multivariate regression results indicate that more MNB entry results in a lower creditsupply by Polish banks during the early transition phase. This result holds regardless of themeasurement of international financial competition, and regardless of a bank’s history, and it isonly partially affected by a bank’s location. More importantly, the overall impact of increasedinternational financial competition on the credit supply of Polish banks is strong enough to lowerthe total credit supply in the Polish economy. Since an earlier study has found that Polishindustries operate under hard budget constraints and are finance constrained during the earlystages of the transition process, a reduction in the credit supply has adverse effects on businessinvestments (Cornelli, Portes, and Schaffer, 1996; Weller, 1999).||en_US|
|dc.relation.ispartofseries|||aZEI working paper |xB 10-1999||en_US|
|dc.title||Financial liberalization, multinational banks and credit supply: The case of Poland||en_US|
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