Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Defensive Expansion Approach to Multinational Banking: Evidence to Date

The Defensive Expansion Approach to Multinational Banking: Evidence to Date I. Introduction That banks follow their clients abroad is the most pervasive proposition in multinational banking. This proposition is so omnipresent that it has been termed the conventional hypothesis (Sabi, 1995). As such, a complete discussion of both the theory and evidence relating to this hypothesis is relevant in an era of increased globalisation of financial services. As argued by Seth et al. (1998), the motives for cross border expansion by banks, and their subsequent performance, are of interest to bankers, rating agencies and regulators, as well as being the subject of academic inquiry. Thus, a comprehensive review of the literature that considers the defensive expansion hypothesis is of value from a number of perspectives. In particular, integration between the theory of the multinational enterprise, the defensive expansion hypothesis and the empirical evidence to date is currently lacking. One of the objectives of this paper is to rectify this gap in the literature. As argued by Graham and Krugman (1994), the pattern of foreign direct investment (FDI) in the banking industry differs from that of other industries. Thus, there is a need to develop an appropriate interface between theory and empirical evidence to ensure that correct inferences are http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Financial Markets, Institutions & Instruments Wiley

The Defensive Expansion Approach to Multinational Banking: Evidence to Date

Loading next page...
 
/lp/wiley/the-defensive-expansion-approach-to-multinational-banking-evidence-to-MufUhsKLwu

References (142)

Publisher
Wiley
Copyright
Copyright © 2002 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0963-8008
eISSN
1468-0416
DOI
10.1111/1468-0416.00008
Publisher site
See Article on Publisher Site

Abstract

I. Introduction That banks follow their clients abroad is the most pervasive proposition in multinational banking. This proposition is so omnipresent that it has been termed the conventional hypothesis (Sabi, 1995). As such, a complete discussion of both the theory and evidence relating to this hypothesis is relevant in an era of increased globalisation of financial services. As argued by Seth et al. (1998), the motives for cross border expansion by banks, and their subsequent performance, are of interest to bankers, rating agencies and regulators, as well as being the subject of academic inquiry. Thus, a comprehensive review of the literature that considers the defensive expansion hypothesis is of value from a number of perspectives. In particular, integration between the theory of the multinational enterprise, the defensive expansion hypothesis and the empirical evidence to date is currently lacking. One of the objectives of this paper is to rectify this gap in the literature. As argued by Graham and Krugman (1994), the pattern of foreign direct investment (FDI) in the banking industry differs from that of other industries. Thus, there is a need to develop an appropriate interface between theory and empirical evidence to ensure that correct inferences are

Journal

Financial Markets, Institutions & InstrumentsWiley

Published: May 1, 2002

There are no references for this article.