Malaysia has been one of the most globalized developing countries after Malaysia’s independence. Globalization helps to economic development and growth in Malaysia. Therefore, Malaysia’s Gross Domestic Product (GDP) ratio has increased, the trade liberalization decreasing, and others will improve our country’s economy.

How does banking sector globalization affect economic growth?

On the one hand, a well-developed banking-industry can ameliorate information and transactions costs, thereby fostering efficient resource allocation and promoting growth. On the other hand, financial development, by enhancing resource allocation and hence the returns to saving, may lower saving rates.

What is the impact of globalization on the banking sector?

A key feature of financial services liberalization is the increasing presence of foreign banks in a nation. This study examines the impact of banking sector globalization on bank profits and cost efficiency by using a panel of 169 nations spanning 1998–2013.

What are the benefits and costs of globalization?

The benefits and costs of banking sector globalization have been hotly debated in the media, policy forums, and academic conferences. Arguments in favor of opening a nation’s banking sector to foreign ownership are made under several premises.

What was the impact of the global financial crisis?

Since the global financial crisis of 2007, international banking has attracted heightened interest from policy makers, researchers, and other financial sector stakeholders. Perhaps no sector of the economy better illustrates the potential benefits—but also the perils—of deeper integration than banking.

How does foreign banks affect the host market?

The effect of foreign banks on profits and costs in host markets are also theoretically debatable. On the one hand, foreign bank presence might lead to higher profitability as foreign bank’s technological edge is relatively strong, and these often internationally well-known banks might also have lower costs of raising funding.