The presence of other firms in a foreign market can have a double-edged effect on the profitability of new entrants. Firstly, a larger presence of other firms implies more competition and thus lowers the earnings prospects of new entrants. Secondly, there might be positive spill-over effects...

Banking and balance of payments crises often happen quite simultaneously. We show that the impact of an expected devaluation on the net worth of commercial banks with a short open foreign exchange position speeds up the timing of a balance of payments crisis. We employ an asymmetric information...

Size effects matter in banking. Typically, banking systems are dominated by a smallnumber of large players who are also active in a large range of countries and marketsegments. At the same time, there exist small and often regionally-focused financialinstitutions. This holds also for the German...