Is there a liability of foreignness in global banking? An empirical test of banks' X‐efficiency

摘要: When a company operates outside of its home country, it may suffer ‘liability foreignness.’ Does this priori theoretical expectation hold in the global banking industry? Banks increasingly compete their countries, and operating environments often differ sharply across both terms financial markets credit risk. In paper, we report results an empirical test liability foreignness industry, using Fitch–IBCA BankScope data for period 1989–96. Our findings strongly support hypothesis. Further, show some evidence that X-efficiency foreign-owned bank is influenced by competitiveness country host which operates. Lastly, find U.S.-owned banks are more X-efficient than other environments, but less others. Copyright © 2002 John Wiley & Sons, Ltd.