Domestic Banks versus Foreign Banks in Terms of Profitability and Risk-taking: A Cross-Country Study

​This paper studies the performance of foreign banks across countries in the world over the period of 1997 to 2011. Some of the existing studies find that foreign banks have competition advantage due to their good management and advanced technology. However, there are also some contradictory evidences in the literatures suggesting that foreign banks in some countries do not perform better than domestic counterparts. Using crosscountry data, this paper empirically examine how foreign banks perform in terms of their profitability and risk taking. And I will make a comparison between foreign banks and domestic banks' performance in different countries.