The Impact of Foreign Banks Entry on Risk and Return: Evidence from the Jordanian and the Arab Gulf Banking

Authors

  • Suzan S. Issa University of Petra
  • Khalid A. Al-Zou'bi Hashemite University

DOI:

https://doi.org/10.34120/ajas.v18i2.793

Keywords:

Operating Expenses, Foreign Banking Entry, Interest Margin

Abstract

This research paper examines the expected effects for the entry of foreign banks on the domestic banking market in Jordan and the Arab Gulf countries. The research is based on the financial statements of sample of 52 banks during the period of 1996-2004. Data is collected from the World Bank, Bank Scope, Arab Monetary Fund, International Monetary Fund, and annual reports. Conclusions show that the entry of foreign banks has an unfavorable effect on net interest margin, accounting profit, and banking risk, and a favorable effect on non-lending activities and operating expenses.

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Author Biographies

Suzan S. Issa, University of Petra

Ph.D. in Finance and Banking Sciences, Arab Academy for Banking and Financial Sciences, Hashemite Kingdom of Jordan, (2006). Assistant Professor, Department of Finance and Banking Sciences, Petra University, Hashemite Kingdom of Jordan. Has research interests in banking and investment and other modern topics related to finance and business.

Khalid A. Al-Zou'bi, Hashemite University

Ph.D. in Financial Economics, Kansas State University, USA (2001). Associate Professor, Department of Financial and Banking Sciences, Hashemite University, Kingdom of Jordan. He has research interests in financial markets and investment portfolio management.

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Published

2011

How to Cite

Issa, S. S., & Al-Zou’bi, K. A. (2011). The Impact of Foreign Banks Entry on Risk and Return: Evidence from the Jordanian and the Arab Gulf Banking. Arab Journal of Administrative Sciences, 18(2), 233–282. https://doi.org/10.34120/ajas.v18i2.793

Issue

Vol. 18 No. 2 (2011)

Section

Finance