Kiel Working Papers, Kiel Institute for World Economics
No 1043:
Distance and International Banking
Claudia M. Buch
Abstract: If the technological revolution which has taken place over
the past decades has lowered information costs and if information costs
increase in distance, distance should ceteris paribus become less
important in determining international bank lending. We are using a dataset
on assets and liabilities of commercial banks from five countries (France,
Germany, Italy, UK, US) in up to 50 host countries for the years 1983
through 1998 to test this hypothesis. For the European banks, distance has
remained of the same importance it used to have. For the US, a declining
importance of distance was found. Several interpretations of these findings
are discussed.
Keywords: cross-border banking, information costs; (follow links to similar papers)
JEL-Codes: F21; G21; (follow links to similar papers)
32 pages, April 2001
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