non-traded consumer goods in an uncertain productive environment, borrowing funds from a bank in either the home or the … risk of bank failure is partly borne by taxpayers in the banks' home countries. Moreover, each bank chooses the allocation … of its lending between domestic and foreign firms, while the bank's overall loan volume is fixed by a capital requirement …

are more likely to enter foreign markets by means of foreign direct investment. We combine detailed proprietary bank …-level data on the international activities of all German banks with publicly available bank micro data from possible destination …