بانک های خارجی و عملکرد صادرات شرکت های بازار نوظهور: شواهدی از هند
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|13718||2013||9 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Research in International Business and Finance, Volume 29, August 2013, Pages 52–60
This paper assesses the case for foreign banks as part of a program of institutional reform geared toward export promotion in emerging market economies. It does so by empirically evaluating the impact of foreign bank participation on the export performance of emerging market firms. It hypothesizes that foreign bank participation will not have a statistically significant moderating effect on the anticipated positive relationship between firm size and export sales. Using an unbalanced panel of 930 firm-year observations for Indian chemical firms over the period 1997–2005, it employs the two-stage least squares (2SLS) method with fixed effects to estimate a simultaneous equations model. The empirical evidence suggests that higher foreign bank participation in the domestic banking sector may attenuate the positive firm size–export sales relationship; however, this mediating effect is not significant in both statistical and economic terms. The main policy implication is discussed.
In recent years, there has been a growing interest in the issue of whether foreign banks should be welcomed by domestic policymakers in emerging market economies characterized by inefficient domestic banking systems (Mathiesen and Roldós, 2001 and Moreno and Villar, 2005). One of the strongest arguments in favor of foreign banks seems to be based on the traditional market power view that emphasizes the efficiency property of a competitive banking system. According to this view, the entry of foreign banks in the domestic banking system will induce competition among banks, and lead to an increase in the supply of cheaper credit ( Bayraktar and Wang, 2004, Claessens et al., 2001, Denizer, 2000 and Hasan and Marton, 2003). If emerging market firms have better access to low-cost credit, the argument goes, then they may be able to grow to an optimal size that will enable them to drive economic growth in a sustainable way ( Ayyagari et al., 2007, Beck and Demirgüç-Kunt, 2006 and Levine, 1996). Despite the anticipated benefits of a competitive banking system, there are several reasons why domestic policymakers in emerging market economies should exercise caution in their approach to foreign banks. First, even if the entry of foreign banks in the domestic banking sector makes it more competitive, this does not necessarily mean that credit supply will increase at a lower price as the market power view suggests. According to the information hypothesis, a more competitive banking sector may make it unprofitable for banks to invest in the generation of propriety information on potential clients. This in turn may lead to an under-investment in relationship-building activities that generate the soft information that is required to finance informationally opaque small firms ( Petersen and Rajan, 1995). Therefore, these small firms may have less access to finance as more foreign banks enter the domestic banking sector. Alternatively, given their limited propriety information on potential domestic clients, foreign banks may employ lending technologies and offer banking services that primarily cater to the most profitable large domestic firms that already enjoy access to credit on favorable terms relative to their small counterparts (Dell’Ariccia and Marquez, 2004 and Sengupta, 2007). Moreover, this ‘cream-skimming’ phenomenon may tighten the financial constraint faced by small emerging market firms (Gormley, 2010). Finally, foreign banks may also constitute a potentially destabilizing force in the domestic banking sector because they are inclined to assume greater risks relative to their domestic counterparts (Hellman et al., 2000). In addition, they have an incentive to pursue an early exit from the domestic economy in the event of a major financial crisis (Agénor, 2003 and Crystal et al., 2001); yet, it is precisely during such a debacle that credit flows must be maintained in order to moderate the tendency toward a major contraction in economic activities. Even if one were prepared to treat the adverse implications of foreign banks for the stability of the domestic banking system as being manageable (Agénor, 2003), emerging market governments are still likely to be very concerned about the prospect for lower credit flows to indigenous firms as more foreign banks enter the domestic banking system. This is so because the financial constraint faced by the typically small-firm dominated private sector may exacerbate under the ‘cream-skimming’ phenomenon that is associated with foreign banks. Moreover, if a competitive banking system may have either favorable or adverse implications for credit supply, then it remains unclear whether domestic policymakers in emerging markets are actually in a position to craft coherent policies on foreign banks. Carbó-Valverde et al. (2009) address the apparent ambiguity in the effect of competition on credit supply by reconciling the market power view with the information hypothesis. In principle, the authors suggest that less competition in the domestic banking sector need not lead to a significant reduction in credit supply if policymakers remove restrictions on the scope of banking activities. As a practical matter, however, it remains unclear how policymakers may optimally balance the opposing market power and information-production effects of competition on credit supply. Thus, emerging market policymakers still appear to face a major gap in knowledge. This in turn makes it difficult for them to formulate policies on foreign banks that are intended to advance the export-promotion objective of emerging market governments. This paper attempts to narrow this knowledge-gap by providing an alternative approach that directly addresses the question of whether foreign banks, as part of a program of institutional reform, may advance the export orientation of emerging market economies. Specifically, it empirically investigates the impact of foreign bank participation – as defined by the share of total domestic banking assets that is controlled by foreign shareholders with 50 percent or more ownership in domestic banks (Claessens et al., 2008) – on the export performance of emerging market firms. It hypothesizes that foreign bank participation alone will not have a statistically significant moderating effect on the expected positive relationship between firm size and export performance. However, the confirmation of this hypothesis is not construed as evidence against foreign banks per se; instead, it serves a basis for further exploring complementary policies that encourage foreign banks to meet the financial needs of emerging market exporting firms. By evaluating the impact of foreign bank participation on export performance within an institutional framework (North, 1986, North, 1993 and North, 1994), this paper also builds upon an emerging strand of literature that generally finds a positive relationship between institutional quality and export performance (Cuervo-Cazurra and Dau, 2009, LiPuma et al., 2011 and Lu et al., 2009). While this paper is most similar to LiPuma et al. (2011), it makes an important departure from the authors’ broad coverage of heterogeneous emerging market economies. It does so by focusing on India; and in particular, Indian chemical firms. India is an interesting case because the distribution of firm size is heavily skewed toward very small manufacturing firms in comparison to other emerging economies such as China (World Bank, 2010). Interestingly, too, India's chemical industry is one of its oldest industries, and has the potential to attain a dominant position in the global chemical industry; yet, it has apparently failed to do so because it continues to be dominated by small chemical firms (Export-Import Bank of India, 2007). By focusing on India, this paper shows that while the improvement in the institutional environment may have a larger marginal impact on the export performance of small emerging market firms relative to their large counterparts (LiPuma et al., 2011), the impact of foreign banks as a stand-alone component of the institutional environment is unlikely to significantly enhance the export performance of these small firms. Importantly, too, this finding adds to the dearth of evidence that casts doubt on the potential for foreign banks to significantly improve the access of small Indian firms to bank credit, all else being equal (Gormley, 2010). The remainder of this paper is organized as follows. The next section reviews the relevant theoretical and empirical literature to develop the hypothesis to be empirically evaluated. This is followed by a description of the statistical model and data employed. The empirical results are then presented. The final section concludes with a summary of the main finding, and a discussion of the key implication for domestic policymakers.
نتیجه گیری انگلیسی
This paper empirically evaluates the magnitude of the potential mediating effect of foreign bank participation on the anticipated positive firm size–export sales relationship using panel data on Indian chemical firms. The empirical evidence suggests that higher foreign bank participation in the domestic banking sector may attenuate the positive firm size–export sales relationship; however, this mediating effect is not significant in both statistical and economic terms. This finding has an important implication for policymakers in emerging market economies such as India, among others. To the extent that domestic policymakers are looking to relax the financial constraint on the international expansion of indigenous firms almost exclusively through policies that welcome foreign banks, this study casts doubt on the effectiveness of such policies; that is, the evidence suggests that foreign banks are unlikely to enhance the capacity of emerging market firms to serve foreign markets through better access to bank credit, all else being equal. Yet, in so far as emerging market exporters are underserved by foreign banks because of their informational opacity, emerging market governments that welcome foreign banks may generally encourage them to serve indigenous firms by implementing complementary policies that either improve the latter's transparency, or circumvent their inherently risky credit profile. As a practical matter, however, it may be worthwhile for domestic policymakers to place greater priority on workable initiatives that may generally help indigenous firms to access bank credit despite their risky credit profile. Among the potential policy solutions along this line, a “reverse factoring” scheme is worth considering (Klapper, 2006). Unlike alternative schemes that tend to call upon fiscally constrained emerging market governments to offer explicit or implicit loan guarantees, reverse factoring is predicated on self-help. That is, the primary goal is to help emerging market firms to obtain working capital on the basis of unpaid invoices generated from credit sales made to relatively large, creditworthy clients at home and abroad. In principle, if an emerging market exporter had sold goods on credit to well-established international corporations, reverse factoring would enable this exporter to sell the unpaid invoices to a third party (i.e. a factor) in exchange for a sum of money that is normally less than the face value of the invoice (i.e. discounted value). If emerging market governments allow foreign banks to provide factoring services along this line, such transactions are expected to take place because they are predicated on the creditworthiness of international firms that just happen to be the clients of emerging market exporting firms. Thus, for emerging market economies characterized by weak credit market information infrastructure, financial policies that encourage foreign banks to provide reverse factoring services may circumvent one of the most formidable institutional barriers that seem to partially block credit flows to indigenous exporting firms. At the same time, if emerging market governments are able to successfully implement a broader set of policies that substantially improve the credit information infrastructure, and the legal and regulatory framework needed to support factoring on a larger scale, then small emerging market exporters may be better placed to secure working capital financing from foreign banks by using a larger share of what may very well be substantial amounts in uncollected accounts receivable.