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- Capital regulation: Combined measure of overall and initial capital stringency, ranging from 0 to 9, with a higher value indicating greater stringency (Source: Beck at el. 2006). Developing country: Indicator variable equal to 1 if the country is not a high-income country, according to the income taxonomy of the Worldbank (Source: WDI, Worldbank). Distance: Geographic distance between Germany and host countryj (Source: CEPII, Paris).
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- Higher values indicate more restrictions (Source: Beck et al. 2006). Concentration: Fraction of total assets held by the three largest banks in the economy (Source: World Bank).
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Martin-Oliver, A., and Salas-Fum
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- Productivity: From Levinsohn and Petrin (2003), estimates of bank productivity. Reserves: Hidden reserves according to 340f of the German commercial code as a percentage of gross total assets. Return on eguity (ROE): Operating results, including net interest, fees, commissions, and trading income as a percentage of equity capital. Total assets: Gross total assets. Definition of banking groups: Large banks represent the head institutions of the savings (`Landesbanken') and cooperative bank sectors, as well as the largest commercial banks. Commercial banks are privately owned but not necessarily publicly listed banks. Savings banks are (local) government-owned regional banks. Cooperative banks are mutually owned regional banks. Country-level variables Activity restrictions: Whether banks are restricted from engaging in securities underwriting, insurance underwriting and selling, real estate investments, management, and development.
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- Rochet, J.-C. (2008). Why are there so many banking crises? In The Politics and Policy of Bank Regulation. Princeton, NJ: Princeton University Press.
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Ruckman, K. (2004). Mode of entry mode into a foreign market: The case of U.S. mutual funds in Canada. Journal of International Economics 62: 4 17-432.
Semykina A., and Wooldridge, J. (2005). Estimating panel data models in the presence of endogeneity and selection: Theory and application. Working Paper. Michigan State University.
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- Using Levinsohn and Petrin' s (2003) estimation approach, we obtain unbiased estimates of the production functions and productivity parameters by exploiting the relationship between banks' demand for intermediate inputs Z and their productivity w~. We acknowledge that Z depends on both state variables: temporarily fixed factors K and unobservable productivity cv.
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Yeaple, R.S. (2009). Firm heterogeneity and the structure of U.S. multinational activity. Journal of International Economics, forthcoming.