Globalization of Turkey’s Banking Sector: the Determinants of Foreign Bank Penetration in Turkey

Abstract

Motivated by the increased importance of foreign bank entry, this paper takes a look at the issue from the perspective of both foreign entrants and the host country. What are the conditions that make the host country market attractive to foreign entrants? What changes in the home country motivate foreign banks to expand abroad? Attracted by the “pull” and “push” factors, foreign banks enter into the banking sector of the host country resulting in both benefits and costs to the domestic sector. Having given the reasons and the effects of foreign entry in a theoretical framework, this study attempts to find out any match of the theory with the evidence.Foreign Bank Entry; Internationalization of Banking