Claessens, S. and van Horen, N. (2014). Location Decisions of Foreign Banks and Competitor Remoteness Journal of Money, Credit and Banking, 46(1):145--170.
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Affiliated authorNeeltje van Horen
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Publication year2014
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JournalJournal of Money, Credit and Banking
This paper examines the role of 'competitor remoteness'—the weighted average distance of all competing banks to a host country—on the location decision of a foreign bank. It uses unique, bilateral data on 1,199 foreign banks from 75 home countries present in 110 host countries. It finds that, besides bilateral distance, competitor remoteness importantly drives foreign banks{\textquoteright} location decisions. The impact of distance and competitor remoteness is stronger for non-OECD home and host countries, when the scale of foreign bank inward and outward investment is limited, and for host countries where foreign banks dominate.