Abstract: We address the causes, consequences, and implications of the cross-border
consolidation of financial institutions by reviewing several hundred studies,
providing comparative international data, and estimating cross-border banking
efficiency in France, Germany, Spain, the U.K., and the U.S. during the 1990s.
We find that, on average, domestic banks have higher profit efficiency than
foreign banks. However, banks from at least one country (the U.S.) appear to
operate with relatively high efficiency both at home and abroad. If these
results continue to hold, they do not preclude successful international
expansion by some financial firms, but they do suggest limits to global
consolidation.
Keywords: Banks, mergers, small businesses, x-efficiency, international finance
Full paper (10778 KB PDF)
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Last update: March 24, 2000
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