Version 1
: Received: 28 September 2024 / Approved: 30 September 2024 / Online: 30 September 2024 (08:53:25 CEST)
How to cite:
Bouzidi, F.; Nefzi, A. The Impact of Foreign Bank Entry on the Efficiency and Sustainability of Domestic Banks in Developing Countries: A Meta-Frontier Approach. Preprints2024, 2024092369. https://doi.org/10.20944/preprints202409.2369.v1
Bouzidi, F.; Nefzi, A. The Impact of Foreign Bank Entry on the Efficiency and Sustainability of Domestic Banks in Developing Countries: A Meta-Frontier Approach. Preprints 2024, 2024092369. https://doi.org/10.20944/preprints202409.2369.v1
Bouzidi, F.; Nefzi, A. The Impact of Foreign Bank Entry on the Efficiency and Sustainability of Domestic Banks in Developing Countries: A Meta-Frontier Approach. Preprints2024, 2024092369. https://doi.org/10.20944/preprints202409.2369.v1
APA Style
Bouzidi, F., & Nefzi, A. (2024). The Impact of Foreign Bank Entry on the Efficiency and Sustainability of Domestic Banks in Developing Countries: A Meta-Frontier Approach. Preprints. https://doi.org/10.20944/preprints202409.2369.v1
Chicago/Turabian Style
Bouzidi, F. and Aida Nefzi. 2024 "The Impact of Foreign Bank Entry on the Efficiency and Sustainability of Domestic Banks in Developing Countries: A Meta-Frontier Approach" Preprints. https://doi.org/10.20944/preprints202409.2369.v1
Abstract
This study, which investigates the impact of foreign bank entry on the efficiency and sustainability of domestic banks in developing countries using a Meta-Frontier analysis to estimate efficiency scores, presents findings of significant importance to banking and finance. By incorporating financial, social, and environmental sustainability proxies—such as efficiency, loan portfolio composition, and macroeconomic conditions—this study assesses whether foreign competition enhances or undermines the long-term stability of domestic banking sectors. The results show that while foreign banks can improve financial efficiency, they may destabilize domestic banks, notably smaller or less capitalized institutions. Additionally, the findings suggest that banks with higher investments in SME lending and green projects demonstrate better social and environmental sustainability. Policymakers and financial institutions must consider these dual effects when promoting foreign bank entry.
Keywords
foreign banks; bank efficiency; sustainability; financial sustainability; social sustainability; environmental sustainability; meta-frontier analysis; developing countries; green lending; sme lending; macroeconomic factors; banking competition
Subject
Business, Economics and Management, Finance
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
