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Positive Theories of Multinational Banking: Eclectic Theory Versus Internalisation Theory

Positive Theories of Multinational Banking: Eclectic Theory Versus Internalisation Theory The choice of an appropriate paradigm to consider banks’ motivation to enter a new market and their subsequent performance is an important issue in multinational banking. This paper discusses this issue within the context of two competing theories of the multinational enterprise and the special theories of banking as applied to the multinational enterprise. The conclusion of this paper is that while it may not be possible to empirically distinguish between the propositions of Eclectic theory and Internalisation theory, Internalisation theory offers a framework with greater internal consistency for the study of the multinational bank. Further, any empirical studies must be conducted within the framework of the appropriate special theories consistent with internalisation theory. These special theories have developed over time in an unstructured fashion, and the application of internalisation theory provides a cohesive framework within which to analyse these theories. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Surveys Wiley

Positive Theories of Multinational Banking: Eclectic Theory Versus Internalisation Theory

Journal of Economic Surveys , Volume 11 (1) – Mar 1, 1997

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Publisher
Wiley
Copyright
Blackwell Publishers Ltd 1997
ISSN
0950-0804
eISSN
1467-6419
DOI
10.1111/1467-6419.00024
Publisher site
See Article on Publisher Site

Abstract

The choice of an appropriate paradigm to consider banks’ motivation to enter a new market and their subsequent performance is an important issue in multinational banking. This paper discusses this issue within the context of two competing theories of the multinational enterprise and the special theories of banking as applied to the multinational enterprise. The conclusion of this paper is that while it may not be possible to empirically distinguish between the propositions of Eclectic theory and Internalisation theory, Internalisation theory offers a framework with greater internal consistency for the study of the multinational bank. Further, any empirical studies must be conducted within the framework of the appropriate special theories consistent with internalisation theory. These special theories have developed over time in an unstructured fashion, and the application of internalisation theory provides a cohesive framework within which to analyse these theories.

Journal

Journal of Economic SurveysWiley

Published: Mar 1, 1997

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