Internationalization of multinational banks: a study of foreign direct investment in seven Latin American countries

Mariscal, Alejandro Santana; Zhang, Yingying; Pascual, Joaquín López

doi:10.1080/02642069.2012.662494

Cited by 10 publications

(9 citation statements)

References 34 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…There are studies that used bank FDI data and formulated hypotheses based on this assumption. Yamori (1998), for example, hypothesized ‘bank FDI follows manufacturing FDI’ in case of Japanese banks; Goldberg and Johnson (1990) hypothesized ‘bank FDI follows general FDI’; Moshirian (2001) and Mariscal et al (2012) hypothesized ‘bank FDI follows non-financial FDI’ for the US, the UK, Germany, and seven Latin American countries; Wezel (2004) hypothesized ‘bank FDI follows non-bank FDI’ in case of German banks. However, many studies have stated that ‘follow the home client ’ hypothesis has limited applicability in recent times (Nolle & Seth, 1996).…”

Section: Theoretical Support and Formation Of Hypothesesmentioning

confidence: 99%

“…Wezel (2004) also did not find any relation between attracting foreign banks and GDP in case of German banks’ entry into Asia and other developing countries. Mariscal et al (2012) adopted generalized least square method (GLS) on panel data and found that increase in the ratio of foreign asset share, economic crisis, removal of banking restrictions, and banking concentration (i.e., the assets share of top three banks to the total assets of all the commercial banks) were the main causes for the decision affecting bank FDI inflow in seven Latin American countries. Molyneux, Nguyen and Xie (2013), in their empirical study on the determinants of foreign bank entry in South East Asian countries after the financial crisis of 1997–98, found an opportunity for profit as the main determinant, whereas manufacturing FDI and bilateral trade were found to have little relation with foreign bank entry.…”

Section: Review Of Literaturementioning

confidence: 99%

“…Most of the studies determining the causes of bank internationalization have adopted asset share of foreign banks and number of foreign banks as the proxies for FDI in the banking sector (Focarelli & Pozzolo, 2005; Goldberg & Johnson, 1990; Kim, 2010; Mutinelli & Piscitello, 2001; Nigh, Cho, & Krishnan, 1986). The studies which used Bank FDI data are focused on developed countries; for example, Yamori (1998) on Japanese FDI in financial sector, Moshirian (2001) on FDI in the US, the UK and Germany, Wezel (2004) on Bank FDI from German multinational banks, and Mariscal, Zhang and Pascual (2012) on bank FDI in seven Latin American countries. To the best of our knowledge, no study on foreign banks in India has used bank FDI data to determine the entry of foreign banks or direct capital inflow into India.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Determinants of Bank Foreign Direct Investment Inflow in India: A Dynamic Panel Data Approach

Massand

Gopalakrishna

2016

IIM Kozhikode Society & Management Review

View full text Add to dashboard Cite

India received highest foreign direct investment (FDI) in the world during the first half of 2015, leaving bigger economies like the US and China behind. In the process of globalization, India has liberalized all its sectors and invited FDI in most of the sectors, albeit with a sectoral cap. Internationalization of banks is perhaps the best example of India’s globalization. There are 44 foreign banks with 300 branches operating in India having a cap of 74 per cent and 20 per cent foreign investment in private and public sector banks, respectively. The present study aims to determine the motives behind bank FDI inflow into India. To accomplish that, a county-wise panel was constructed and bank FDI data from 2001 to 2013 was analyzed through generalized method of moments, a dynamic panel data model. The result of the study shows that bank FDI follows overall FDI, indicating that foreign banks follow their clients from their home country to serve them in the host country. However, locational advantages offer them profit-making opportunities and thus play a limited role in drawing bank FDI, which contribute to the development of the Indian economy. The argument that bank FDI inflow increases during a period of crisis is not relevant in the Indian context. The study suggests increasing the FDI cap in banking sector to attract more FDI and further relax the current restrictive policy on entry of foreign banks in India.

show abstract

Section: Theoretical Support and Formation Of Hypothesesmentioning

confidence: 99%

Section: Review Of Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Determinants of Bank Foreign Direct Investment Inflow in India: A Dynamic Panel Data Approach

Massand

Gopalakrishna

2016

IIM Kozhikode Society & Management Review

View full text Add to dashboard Cite

show abstract

“…In fact, we are aware of only three studies which systematically explore _________________________ 1 Econometric industry studies became available, with some exceptions, only in recent years. To mention are Lin (2010) and Narayanan and Bhat (2010) for ICT/software; Contractor and Kundu (1998), Brown et al (2003), León-Darder et al (2010) and Villar et al (2012) for the hotel industry; Ursacki and Vertinsky (1992), Nachum and Wymbs (2005) and Mariscal et al (2012) for financial services; Terpstra and Yu (1988); Rodriguez and Nieto (2012) for some knowledge-intensive service industries.…”

Section: Introductionmentioning

confidence: 99%

Does the Explanatory Power of the OLI Approach Differ Among Sectors and Business Functions? Evidence from Firm-level Data

2016

View full text Add to dashboard Cite

As services and goods differ with respect to important characteristics, one may expect that the determinants of internationalisation are not identical for services and manufacturing. Surprisingly, there is practically no firm-level research contrasting the two sectors in this respect. To fill this gap, the authors aim at identifying for the two sectors the determinants of a firm's propensity to engage in exports or FDI as well as the factors determining a firm's FDI strategy in terms of business functions. They find that an OLI-based model is well suited for explaining the propensity to go international as well as the differences between specific forms of FDI in terms of business functions both for manufacturing and services. As expected, the explanatory power of the OLI approach is stronger for manufacturing than service activities.Data available upon request (see the following link):http://www.economics-ejournal.org/data-availabilty-dp-2015-67/view JEL F23

show abstract

“…Econometric studies dealing at firm level with specific service industries became available, with some exceptions, only in recent years: Narayanan and Bhat (2010), Lin (2010) for ICT/software; Villar et al (2012), León-Darder et al (2010), Brown et al (2003), Contractor and Kundu (1998) for the hotel industry; Mariscal et al (2012), Nachum and Wymbs (2005), Ursacki and Vertinsky (1992) for financial services; Rodriguez and Nieto (2012) and Terpstra and Yu (1988) for knowledgeintensive service industries.…”

mentioning

confidence: 99%

Determinants of Internationalisation Do They Differ Among Sectors and Business Functions? Evidence from Firm-Level Data

2013

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe relevance of services FDI strongly increased over the last two decades. As goods and services differ with respect to important characteristics, one may expect that the determinants of internationalisation are not identical in manufacturing and the service sector. However, there is practically no firm-level research contrasting the two sectors in this respect. In order to fill this gap, we seek to identify for manufacturing and services, firstly, the determinants of a firm's propensity to go international (exports and/or foreign direct investment) and, secondly, the factors determining the complexity of a firm's direct foreign activities in terms of business functions. We find that an OLI-based model can be used to explain not only the propensity to go intenational but also differences between two specific forms of direct foreign investment for both the manufacturing and the service sector.

show abstract

Internationalization of multinational banks: a study of foreign direct investment in seven Latin American countries

Cited by 10 publications

References 34 publications

Determinants of Bank Foreign Direct Investment Inflow in India: A Dynamic Panel Data Approach

Determinants of Bank Foreign Direct Investment Inflow in India: A Dynamic Panel Data Approach

Does the Explanatory Power of the OLI Approach Differ Among Sectors and Business Functions? Evidence from Firm-level Data

Determinants of Internationalisation Do They Differ Among Sectors and Business Functions? Evidence from Firm-Level Data

Contact Info

Product

Resources

About