Foreign banks' entry into the market impact on credit allocation in transition economies: A comparative analysis after 1995

The Fall of Union of Soviet Socialist Republics towards the end of previous century and attempts of disrupted countries to pass to market economy, attracted the attention of scholars. That the transition times of these countries named transition economies vary, is due to the the geographies of these countries and their circumstances before the planned economy periods. The attention that foreign banks Show to these transition economies, increase after the liberalization of financial markets of these countries. Positive and negatif aspects of the presense of foreign banks in transition countries are tried to put forward in academic studies.In this study, the association between the presense of foreign banks and credit allocation in the period of 1995-2008 in transition countries is studied. In the study, panel data management method has been used. The relationships between the presense of foreign bank and, credites that are allocated to private sector are interpretted as a result of this study. It has been shown in transition economies that the presense of foreign bank contributes positively to the credits in macro dimensions.Keywords: Foreign Banking, Allocation of Credit, Transition Countries, Access to Credit