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Article
Characteristics determining the efficiency of foreign banks in Australia
Globalisation and Development Centre
  • Jan-Egbert Sturm
  • Barry Williams, Bond University
Date of this Version
11-1-2008
Document Type
Journal Article
Publication Details
Citation only

Sturm, J. and Williams, B. (2008) Characteristics determining the efficiency of foreign banks in Australia. Journal of banking and finance. Vol 32, No. 11, pp 2346-2360.

2008 HERDC Submission.

FoR Code: 1402.

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Copyright © Elsevier B.V., 2009. All rights reserved.

[GDC Working Paper Series; No. 9, Sep. 2007]
Abstract

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 al. (2000) are identified, in that nationality specific factors represented by dummy variables are not significant once other relevant effects are controlled for. Parent profitability is not fomad to result in increased host nation efficiency, while parent credit rating effects are mixed. Some evidence is presented that banks from more financially sophisticated nations are more efficient. The implications of these results are explored from the perspectives of bank management and bank regulators.

Citation Information
Jan-Egbert Sturm and Barry Williams. "Characteristics determining the efficiency of foreign banks in Australia" (2008)
Available at: http://works.bepress.com/barry_williams/3/