Investigating Opinions of Local Bankers of Jordan Towards the Foreign Banks Entry – Dr. Abdelrahim Kadomi & Dr. Abdullah Barakat
Abstract:
This study aimed to investigate the opinions of local bankers of Jordan toward the foreign banks entry. Generally, foreign banks presence was a topic of Stiglitz (1993), Peek and Rosengren (2000), in pointing out an associated potential costs such as: weakening of domestic banks from increased competition, and adverse foreign stocks to domestic markets from repercussion on foreign banks. Morgan and Strahan (2004), indicated a positive association between foreign presence and economic volatility. However, Sabi (1996), Chantapong (2003), used regression analysis to investigate the performance of domestic and foreign banks in terms of their profitability, operating costs, quality of credit and commitment. They reported a positive role for these banks over the local banks. This paper adapted a new look in conducting an opinion survey, investigating the local bankers of the negative and positive point of views toward the entries of foreign banks. The investigated areas included local banks efficiency reform, and local banks practices. In the efficiency reform area, respondents agreed about the positive role of foreign banks in enhancing the whole elements of banking issues. They agreed upon some negative role or pull effect on the areas of local banks market share and high qualified local staff. Additionally, respondents agreed about no propability of weaking the local banks practices toward enhancing profitability, elements of creditability, lending growth, and total asset growth. The mean, standard deviation, and t-test were used in the analysis and test hypothesis.
Key words: Foreign Banks Entry, Bankers Opinions, Jordan.