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The Role of Location-Related Factors in U.S Banking Involvement Abroad: An Empirical Examination

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Author Info

  • Douglas Nigh

    (The Pennsylvania State University)

  • Kang Rae Cho

    (The Pennsylvania State University)

  • Suresh Krishnan

    (The Pennsylvania State University)

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    Abstract

    This study examines the role of major location-specific advantages in the international branch banking involvement of U.S. banks. Using pooled time-series (1976-82), cross-sectional (thirty countries) regression analysis, this study finds that the U.S. business presence in foreign country has a strong positive effect on U.S. branch banking activity in that country. In contrast, the local market opportunity appears to have no significant effect. These results hold for the entire set of countries, as well as each of five subsets (developed, less developed, European, Latin American, and Asian countries). The openness of the host country to the establishment of new foreign bank branches does affect U.S. branch banking involvement. This effect is most pronounced in the less developed countries, particularly those in Asia.© 1986 JIBS. Journal of International Business Studies (1986) 17, 59–72

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 17 (1986)
    Issue (Month): 3 (September)
    Pages: 59-72

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    Handle: RePEc:pal:jintbs:v:17:y:1986:i:3:p:59-72

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    Cited by:
    1. Yamori, Nobuyoshi, 1997. "Do Japanese banks lead or follow international business? An empirical investigation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 7(4), pages 369-382, December.
    2. Bouquet, Cyril & Hebert, Louis & Delios, Andrew, 2004. "Foreign expansion in service industries: Separability and human capital intensity," Journal of Business Research, Elsevier, vol. 57(1), pages 35-46, January.
    3. Shapiro, Daniel & Globerman, Steven, 2003. "Foreign investment policies and capital flows in Canada: a sectoral analysis," Journal of Business Research, Elsevier, vol. 56(10), pages 779-790, October.
    4. Sanchez-Peinado, Esther & Pla-Barber, Jose, 2006. "A multidimensional concept of uncertainty and its influence on the entry mode choice: An empirical analysis in the service sector," International Business Review, Elsevier, vol. 15(3), pages 215-232, June.
    5. Wright, April, 2002. "The impact of competition on the operations of foreign banks in Australia in the post-deregulation period," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 359-375.
    6. Avkiran, Necmi K., 2006. "Developing foreign bank efficiency models for DEA grounded in finance theory," Socio-Economic Planning Sciences, Elsevier, vol. 40(4), pages 275-296, December.
    7. Fung, Justin G. & Bain, Elisa A. & Onto, John G. & Harper, Ian R., 2002. "A decade of internationalization: the experience of an Australian retail bank," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 399-417.
    8. Williams, Barry, 1998. "A pooled study of the profits and size of foreign banks in Australia," Journal of Multinational Financial Management, Elsevier, vol. 8(2-3), pages 211-231, September.
    9. Dahl, Drew & Shrieves, Ronald E., 1999. "The extension of international credit by US banks: a disaggregated analysis, 1988-1994," Journal of International Money and Finance, Elsevier, vol. 18(1), pages 153-167, January.
    10. Yamori, Nobuyoshi, 1998. "A note on the location choice of multinational banks: The case of Japanese financial institutions," Journal of Banking & Finance, Elsevier, vol. 22(1), pages 109-120, January.
    11. Li-Gang Liu, 2005. "The Impact of Financial Services Trade Liberalization on China," Discussion papers 05024, Research Institute of Economy, Trade and Industry (RIETI).
    12. Mutinelli, Marco & Piscitello, Lucia, 2001. "Foreign direct investment in the banking sector: the case of Italian banks in the '90s," International Business Review, Elsevier, vol. 10(6), pages 661-685, December.
    13. Molyneux, Philip & Nguyen, Linh H. & Xie, Ru, 2013. "Foreign bank entry in South East Asia," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 26-35.
    14. Drew Dahl & Andrew Logan, 2005. "The exposure of international bank loans to third-country risk: an empirical analysis of overdue claims," Bank of England working papers 247, Bank of England.
    15. Parkhe, Arvind & Miller, Stewart R., 1998. "Foreign operations of U.S. banks: Impact of environmental differences and ownership advantages on organizational form preferences," Journal of International Management, Elsevier, vol. 4(1), pages 59-83, July.
    16. Minh To, Huong & Tripe, David, 2002. "Factors influencing the performance of foreign-owned banks in New Zealand," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 341-357.
    17. Kyriaki Kosmidou & Fotios Pasiouras & Angelos Tsaklanganos, 2005. "Factors influencing the profits and size of Greek banks operating abroad: a pooled time-series study," Applied Financial Economics, Taylor & Francis Journals, vol. 15(10), pages 731-738.
    18. Williams, Barry, 2003. "Domestic and international determinants of bank profits: Foreign banks in Australia," Journal of Banking & Finance, Elsevier, vol. 27(6), pages 1185-1210, June.

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