Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69988
Authors: 
Niepmann, Friederike
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Monetary Policy and International Finance 4120
Abstract: 
Banking across borders has risen substantially over the past two decades. Yet there is significant heterogeneity in the international and global activities of banks across countries. This paper develops and tests a theoretical model that explains this variation from an international trade theory perspective. In the model, banking across borders arises from differences in factor endowments and differences in banking sector efficiencies between countries. The paper shows how these differences determine banks' foreign asset and liability holdings as well as foreign direct investment in the banking sector. It highlights the differential effects of capital account and banking sector liberalization on banks' foreign positions and international capital flows. The model is consistent with major stylized facts on cross-border banking. The data strongly support its cross-sectional predictions.
Subjects: 
cross-border banking
international capital flows
trade in banking services
JEL: 
F21
F23
F34
G21
Document Type: 
Working Paper

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