Banking Market Liberalization and Bank Performance: the Role of Entry Modes

This paper analyzes the evolution in bank performance following the removal of legal restrictions on the entry of foreign banks in three transition economies: the Czech Republic, Hungary, and Poland. Two modes of foreign bank entry are considered: entry by Greenfield investments, and by foreign mergers and acquisitions of domestic banks. For this purpose, we construct a panel data of banks from the three countries over the period 1994-2004. We determine the dates on which liberalization occurred in each country. Bank performance is reflected by accounting measures of profitability, net interest margin, and operating costs. The results show a very limited effect of the entry of Greenfield banks on domestic banking market in the early transition period. In contrast, the foreign entry by mergers and acquisitions of domestic banks exerts significant impacts on bank performance. Indeed, we observe significant declines in banks' profits and net interest margins, and a significant increase in operating costs. Our results have important policy implications for those emerging and transition economies still hesitant to liberalize their banking markets.http://deepblue.lib.umich.edu/bitstream/2027.42/64408/1/wp948.pd

Banking Market Liberalization and Bank Performance: the Role of Entry Modes

This paper analyzes the evolution in bank performance following the removal of legal restrictions on the entry of foreign banks in three transition economies: the Czech Republic, Hungary, and Poland. Two modes of foreign bank entry are considered: entry by Greenfield investments, and by foreign mergers and acquisitions of domestic banks. For this purpose, we construct a panel data of banks from the three countries over the period 1994-2004. We determine the dates on which liberalization occurred in each country. Bank performance is reflected by accounting measures of profitability, net interest margin, and operating costs. The results show a very limited effect of the entry of Greenfield banks on domestic banking market in the early transition period. In contrast, the foreign entry by mergers and acquisitions of domestic banks exerts significant impacts on bank performance. Indeed, we observe significant declines in banks' profits and net interest margins, and a significant increase in operating costs. Our results have important policy implications for those emerging and transition economies still hesitant to liberalize their banking markets.Banking, Transition Economies, Foreign Bank Entry, Greenfield Investment, Mergers and Acquisitions, Bank Performance.

Does the Entry Mode of Foreign Banks Matter for Bank Efficiency? Evidence from the Czech Republic,Hungary, and Poland

This paper investigates the impact of specific modes of entry of foreign banks, i.e. greenfield investment versus merger and acquisition, on bank performance in three transition economies ñ the Czech Republic, Hungary, and Poland. We use stochastic frontier analysis to model and measure the cost efficiency of banks. We adopt a maximum likelihood approach to estimation in which the variance of the one-sided error term is modeled jointly with the cost frontier, thus enabling us to retrieve efficiency scores, as well as estimating the various determinants of X-inefficiency. We first find that foreign banks are generally more cost efficient than their domestic counterparts, a result that confirms those of the existing empirical literature. We then turn our focus to comparative performance of greenfield banks versus merger and acquisition banks (M & As), and of M & As versus domestic banks. The results show that on average, M & As are surpassed in terms of efficiency by greenfields banks, but no cost efficiency difference is apparent between M & As and domestic banks. However, we find a strong age effect with respect to M & As which suggests that the evolution of M & Así efficiency follows an inverse U-shape, that means M & As tend to get more inefficient following the acquisition, but approximately 4 years and a haft later, their efficiency starts to improve.http://deepblue.lib.umich.edu/bitstream/2027.42/64431/1/wp925.pd

Does the Entry Mode of Foreign Banks Matter for Bank Efficiency? Evidence from the Czech Republic,Hungary, and Poland

This paper investigates the impact of specific modes of entry of foreign banks, i.e. greenfield investment versus merger and acquisition, on bank performance in three transition economies – the Czech Republic, Hungary, and Poland. We use stochastic frontier analysis to model and measure the cost efficiency of banks. We adopt a maximum likelihood approach to estimation in which the variance of the one-sided error term is modeled jointly with the cost frontier, thus enabling us to retrieve efficiency scores, as well as estimating the various determinants of X-inefficiency. We first find that foreign banks are generally more cost efficient than their domestic counterparts, a result that confirms those of the existing empirical literature. We then turn our focus to comparative performance of greenfield banks versus merger and acquisition banks (M&As), and of M&As versus domestic banks. The results show that on average, M&As are surpassed in terms of efficiency by greenfields banks, but no cost efficiency difference is apparent between M&As and domestic banks. However, we find a strong age effect with respect to M&As which suggests that the evolution of M&As’ efficiency follows an inverse U-shape, that means M&As tend to get more inefficient following the acquisition, but approximately 4 years and a haft later, their efficiency starts to improve.Banking, Transition Economies, Foreign Bank Entry, Greenfield, Mergers and Acquisitions, Stochastic Frontier Analysis, Cost Efficiency.

An explicit Fourier-Klibanov method for an age-dependent tumor growth model of Gompertz type

This paper proposes an explicit Fourier-Klibanov method as a new approximation technique for an age-dependent population PDE of Gompertz type in modeling the evolution of tumor density in a brain tissue. Through suitable nonlinear and linear transformations, the Gompertz model of interest is transformed into an auxiliary third-order nonlinear PDE. Then, a coupled transport-like PDE system is obtained via an application of the Fourier-Klibanov method, and, thereby, is approximated by the explicit finite difference operators of characteristics. The stability of the resulting difference scheme is analyzed under the standard 2-norm topology. Finally, we present some computational results to demonstrate the effectiveness of the proposed method.Comment: 19 pages, 56 figures, 1 tabl

Species diversity of rotifers (Rotifera: Eurotatoria) of Phu Ninh Lake with five new records from Vietnam

A total of sixty-one taxa of rotifer, belonging to 15 families, 3 orders were identified from the Phu Ninh Lake, Vietnam. Of these, five species were recorded new to Vietnam Rotifera fauna, including Lecane acanthinula (Hauer, 1938), L. sola (Hauer, 1936), L. thailandensis Segers & Sanoamuang, 1994, L. pyriformis (Daday, 1905), and Mytilina bisulcata (Lucks, 1912). The result raised the total number of rotifers known from Vietnam to 227 species. Moreover, the results showed that the number of species recorded increased with the increase of sample size, which followed the equation y=12.85+14.12log(x) (R2 = 0.99). Based on the estimators, the α-diversity of rotifers in Phu Ninh Lake might be up to 67±4 taxa (according to the Bootstrap index), 71±8 taxa (according to the Chao index), or even up to 79 taxa (according to Jacknife 2 index)

Seed Health and Quality of Rice Seeds Produced by Farmer and Growing in Cho Moi District, An Giang Province, Vietnam

This study was conducted at Laboratory in An Giang University; the varieties examined were collected from farmer households in 2018 – they were varieties that the farmer stored for the next crop (Winter-Spring) from Autumn-Winter crop in Cho Moi district, An Giang Province, Vietnam. The research evaluated the quality of seed rice, which is provided and planted by the farmer. As a result, this study showed that almost all of the varieties of seed rice from farmer households indicated the ratio of filled-grain, the germination, and the determination of seedling healthy, which are lower than certified variation. Besides, the samples of seed rice from farmer household have more infected fungal; especially the samples with higher in a filled-grain ratio is less infected by fungi, there were 12 types of seed borne-fungi in rice varieties from the farmer (in Cho Moi district), included: Alternaria padwickii, Rhizoctonia solani, Aspergillus oryzae, Bipolaris oryzae, Cercospora janseana, Curvularia lunata, Fusarium moniliforme, Pyricularia oryzae, Sarocladium oryzae, Tilletia barclayana, Fusarium graminearum, and Ustilaginoidea viren