Abstract

The main purpose of transnational banks is to mobilize and redistribute funds in such a way as to maximize profits. The foreign economic activity of TNB is a generating factor for the expansion and development of globalization processes, the economic ties of most countries in the world. The increasing importance of TNBs in the world economy is explained by the consolidation of banking and industrial capital, which is an important trend in modern economic relations. If previously TNBs were issuing loans, mainly on foreign trade transactions, now they are crediting any operations of their clients.The main purpose of the article is to identify the factors that have the greatest impact on the economic and financial development of the developing countries by constructing the regression models and analyzing their results. To assess the impact of TNBs on the economy and the financial sector, three developing countries, which were included in the list of “Top-20 emerging economies”, were selected. Those are Poland, Brazil and Turkey. As a dependent variable, GDP per capita was chosen as an indicator of economic development, as independent variables were chosen: Poland – share of assets of foreign banks in the total banking assets of Poland (X1), share of foreign banks among the total number of banks (X2), capitalization of the stock market (X3), loans to the private sector in relation to GDP (X4) and the ratio of deposits to GDP (X5); Brazil – the share of assets of foreign banks in the country’s total banking assets (X1), share of foreign banks among the total number of banks (X2), capitalization of the stock market (X3), loans given to the private sector in relation to GDP (X4) and the ratio of deposits to GDP (X5); Turkish – the share of assets of foreign banks in the country’s total banking assets (X1); share of foreign banks among the total number of banks (X2); loans to the private sector in relation to GDP (X4) and the ratio of deposits to GDP (X5). The study period was 21 years, from 1995 to 2015. Poland is characterized by the fact that the country’s economy is the most influenced by such indicators as the share of assets of foreign banks in total banking assets of Poland, as well as the proportion of foreign banks among the total number of banks. The banking sector is very internationalized. The arrival of foreign capital in the banking systems of Poland was associated with the privatization processes in order to stabilize the economy, as well as attracting foreign investment. For Brazil and Turkey, loans and deposits relative to GDP have the greatest impact on the development of their economies. In Brazil, with an increase in the volume of loans issued, there was a reduction in household incomes. So in the country the majority of the population has the overdue loans, moreover, GDP per capita also has had a downward trend since 2011. Between credits, deposits and GDP per capita in Turkey there is a direct dependence, i.e. with an increase in the volume of loans and deposits, there is an increase in the incomes of the population. When constructing models that characterize the influence of the TNB on the financial sector, only the Turkish one turned out to be significant.

Keywords: transnational banks, economic development, financial sector, loans, deposits, foreign capital

JEL Classification: G150, L120.

Cite as: Fernandes, A. J. L. (2018). Transnational banks’ influence on the development of the economy and the financial sector of developing countries (on the example of Poland, Brazil, Turkey). Marketing and Management of Innovations, 3, 253-259. https://doi.org/10.21272/mmi.2018.3-22

This work is licensed under a Creative Commons Attribution 4.0 International License

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