Purpose - The purpose of this paper is to explore the factors that affect differences in measured efficiency of foreign-owned banks operating in Australia. The relevance of both comparative advantage theory and new trade theory to multinational banking in Australia will be tested....

This study examines the factors that determine differences in efficiency of foreign banks in the host market (Australia). The impact of home market, host market and parent bank characteristics are considered within the frameworks offered by comparative advantage and new trade theories....

The factors determining foreign bank efficiency are investigated using a three stage research method. It is found that host market incumbency reduces efficiency of foreign banks in Australia, resulting in over use of inputs. Factors underlying the limited global advantage hypothesis of Berger et...