The Determinants of the Foreign Banks' Expansion in South Eastern Europe: Do Greek Banks Still Follow Their Customers Abroad or Not?

Fotopoulos, Stefanos V.; Siokis, Fotios M.; Papapanagos, Harry

doi:10.13189/aeb.2016.041106

Cited by 2 publications

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References 30 publications

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“…It was found that banks from developed economies seek to expand their scale and market and enhance their competitiveness by establishing overseas branches (Mastrapasqu, 1973; Petrou, 2007). In addition, the global expansion of banks from developed economies are also driven by the internationalization of their clients, which subsequently promotes banks to expand abroad (Chou & Shen, 2014; Fotopoulos et al., 2016). Compared to their Western counterparts, the expansion of banks from China had been limited over the past decades (Pan, He, Sigler, et al., 2018).…”

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confidence: 99%

The expansion of Chinese banks along the routes of the Belt and Road Initiative: Following customers and geopolitical relations

Cai

Pan

2022

Growth and Change

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Existing studies on the global expansion of banks have been mostly based on the experience of the banks from more developed economies, while little is known about the geographies of internationalization of banks from less developed countries. The expansion of Chinese banks, with state‐owned commercial banks in the lead, has been accelerating since the Belt and Road Initiative (BRI) was proposed in 2013. This study contributes to existing research by providing new evidence and explanations based on the case of expansion of Chinese banks along the BRI routes. Chinese banks started to expand from Hong Kong and Macao, then expanded to Southeast Asia and the Arabian Peninsula, and finally reached Central Asia and other regions. The branches of Chinese banks are mainly clustered in Southeast Asian countries rather than other regions. Similar to their Western counterparts, Chinese bank branches are inclined to agglomerate in international or regional financial hubs. The regression analysis shows that two factors are crucial in explaining the spatial distribution of Chinese banks along the routes of the BRI. First, Chinese banks are likely to follow their customers, namely, state‐owned firms from the non‐financial sectors making direct investments in overseas regions. Second, Chinese banks are more inclined to open branches in countries that have good geopolitical relations with China reflecting the challenging international environment for Chinese banks to seek global expansion.

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