The paper studies the nature of spillover effects in bank lending flows from advanced to the emerging markets and identifies specific channels through which such effects occur. Based on a gravity approach, we examine a panel data set on cross-border bank flows from 17 BIS reporting advanced...

Financial institutions are increasingly linked internationally and engaged in cross-border operations. As a result, financial crises and potential bail-outs by governments have important international implications. Extending Allen and Gale (2000), we provide a model of international contagion...

We study the effect of international financial integration on economic development when the quality of governance may be compromised by corruption. Our analysis is based on a dynamic general equilibrium model of a small economy in which growth is driven by capital accumulation and public policy...

The empirical literature finds mixed evidence on the existence of positive productivity externalities in the host country generated by foreign multinational companies. We propose a mechanism that emphasizes the role of local financial markets in enabling foreign direct investment (FDI) to...

Does financial sector foreign direct investment (FSFDI) trigger general capital inflows and foreign trade? Do these inflows to New EU Member States (NMS) provide positive signals (Spence, 1973) towards economic development or 'crowd out' investment and trade? While the direct impact of financial...

Credit market imperfections give rise to boom-bust cycle episodes in emerging markets. In the present paper, we aim to provide a comprehensive analysis for Eastern Europe. We focus on documenting credit market imperfections, asymmetric financing opportunities across sectors, and business cycle...

In theory, the presence of foreign banks has spillover and competition effects on domestic banks leading to higher efficiency. Next to foreign banks from industrialized countries (north-south banks), foreign banks from developing countries (south-south banks) are important investors in...

This paper examines the effects of political agreements on regional financial integration (RFI) on financial market development and access to and cost of finance in Sub-Saharan Africa. Our results suggest that RFI positively affects financial development - measured very broadly as the size of...

This paper examines the efficiency effects of foreign bank entry on domestic banks in sub-Saharan Africa during the period 1999-2006. Using a recently compiled dataset on foreign bank presence, the competition and spillover effects of North-South, regional and nonregional South-South banks are...