Financial repression and liability of foreignness in developing countries

Ataullah, Ali and Le, Hang (2004). Financial repression and liability of foreignness in developing countries. Applied Economics Letters, 11(9) pp. 545–549.

DOI: https://doi.org/10.1080/1350485042000263034

Abstract

Using non-parametric Data Envelopment Analysis, this paper suggests that the era of financial repression in developing countries, by providing policy-induced competitive advantages to domestic banks, may create liability of foreignness for foreign banks that impeded their resource utilization. Implementation of financial liberalization programme, which endeavours to create a more market-oriented financial sector, may enable foreign banks to overcome the liability of foreignness and enhance their resource utilization.