Entry and Survival: The Case of Foreign Banks in Norway
AbstractBanks have been engaging in foreign direct investment (FDI) for over 150 years. In doing so, they have had to deal with the problems of the liability of foreignness, generally without being able to depend on proprietary administrative or physical technology. Foreign direct investment in banking therefore provides many experiments in entry and survival in a comparable industry across countries and institutional environments. Within banking, the Norwegian case has a number of useful characteristics. First, there is a clear and recent starting point for the entry of foreign banks. Second, there is an interesting mix of entrants and abstainers, and entry strategies. Third, enough time has elapsed that one can start to observe failures and survivors. In Section 2 I review the history of the Norwegian banking system and especially policies towards foreign banks. In brief, Norway has a long history of closure to foreign banks. In Section 3 I examine which foreign banks did or did not enter Norway when the government liberalized entry. The banks that entered had divergent firm-specific resources and followed divergent strategies. I pay particular attention to issues of the foreign banks' prior experience in Norway itself and the foreign banks' advantages vis-à-vis domestic banks. In Section 4 I investigate the correlates of survival and exit among the foreign bank entrants. Survival factors include prior experience in Norway, the size of the entrant at start-up, and the size of the parent. Lastly, Section 6 is a summary and conclusion.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Wharton School Center for Financial Institutions, University of Pennsylvania in its series Center for Financial Institutions Working Papers with number 97-40.
Date of creation: Aug 1997
Date of revision:
Contact details of provider:
Postal: 3301 Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104.6367
Web page: http://fic.wharton.upenn.edu/fic/
More information through EDIRC
Other versions of this item:
- Tschoegl, Adrian E., 2002. "Entry and survival: the case of foreign banks in Norway," Scandinavian Journal of Management, Elsevier, vol. 18(2), pages 131-153, June.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baldwin, John R. & Rafiquzzaman, Mohammed, 1995.
"Selection versus evolutionary adaptation: Learning and post-entry performance,"
International Journal of Industrial Organization,
Elsevier, vol. 13(4), pages 501-522, December.
- Baldwin, John R. & Raffiquzzaman, Mohammed, 1995. "Selection Versus Evolutionary Adaptation: Learning and Post-entry Performance," Analytical Studies Branch Research Paper Series 1994072e, Statistics Canada, Analytical Studies Branch.
- Siv Fagerland Jacobsen & Adrian E. Tschoegl, 1997.
"The International Expansion of the Norwegian Banks,"
Center for Financial Institutions Working Papers
97-38, Wharton School Center for Financial Institutions, University of Pennsylvania.
- M. Boldt-Christmas & S. F. Jacobsen & A. Tschoegl, 2001. "The International Expansion of the Norwegian Banks," Business History, Taylor & Francis Journals, vol. 43(3), pages 79-104.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Ongena, S. & Smith, D.C., 1998. "Quality and duration of banking relationships," Open Access publications from Tilburg University urn:nbn:nl:ui:12-80677, Tilburg University.
- Berg, Sigbjorn Atle & Forsund, Finn R. & Hjalmarsson, Lennart & Suominen, Matti, 1993. "Banking efficiency in the Nordic countries," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 371-388, April.
- Steven Ongena & David C. Smith, 1997.
"Empirical Evidence on the Duration of Bank Relationships,"
Center for Financial Institutions Working Papers
97-15, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Steven Ongena & David C. Smith, 1997. "Empirical Evidence on the Duration of Bank Relationships," Finance 9703002, EconWPA.
- Ball, Clifford A. & Tschoegl, Adrian E., 1982. "The Decision to Establish a Foreign Bank Branch or Subsidiary: An Application of Binary Classification Procedures," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 17(03), pages 411-424, September.
- Grosse, Robert & Goldberg, Lawrence G., 1991. "Foreign bank activity in the United States: An analysis by country of origin," Journal of Banking & Finance, Elsevier, vol. 15(6), pages 1093-1112, December.
- Sherrill Shaffer, 1994. "Market conduct and aggregate excess capacity in banking: a cross- country comparison," Working Papers 93-28/R, Federal Reserve Bank of Philadelphia.
- Barros, Pedro Pita, 1995. "Post-entry expansion in banking: The case of Portugal," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 593-611, December.
- J W Harrington, 1992. "Determinants of bilateral operations of Canadian and US commercial banks," Environment and Planning A, Pion Ltd, London, vol. 24(1), pages 137-151, January.
- Chwo-Ming J Yu & Kiyohiko Ito, 1988. "Oligopolistic Reaction and Foreign Direct Investment: The Case of the U.S. Tire and Textiles Industries," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 449-460, September.
- Ursacki, Terry & Vertinsky, Ilan, 1992. "Choice of entry timing and scale by foreign banks in Japan and Korea," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 405-421, April.
- Pablo T. Spiller & Edgardo Favaro, 1984. "The Effects of Entry Regulation on Oligopolistic Interaction: The Uruguayan Banking Sector," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 244-254, Summer.
- Heinkel, Robert L. & Levi, Maurice D., 1992. "The structure of international banking," Journal of International Money and Finance, Elsevier, vol. 11(3), pages 251-272, June.
- C.P. Kindleberger, 1995. "Asset inflation and monetary policy," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 17-37.
- C.P. Kindleberger, 1995. "Asset inflation and monetary policy," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 17-37.
- Goldberg, Lawrence G. & Johnson, Denise, 1990. "The determinants of US banking activity abroad," Journal of International Money and Finance, Elsevier, vol. 9(2), pages 123-137, June.
- Tschoegl, Adrian E., 2002. "Introduction to the special issue," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(4-5), pages 291-297.
- Adrian E. Tschoegl, 2004. "Financial Crises and the Presence of Foreign Banks," International Finance 0405016, EconWPA.
- Gino Cattani & Adrian E. Tschoegl, 2002. "An Evolutionary View of Internationalization: Chase Manhattan Bank, 1917 to 1996," Center for Financial Institutions Working Papers 02-37, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Tschoegl, Adrian, 2006. "Foreign ownership in Mexican Banking: A Self- Correcting Phenomenon," MPRA Paper 586, University Library of Munich, Germany.
- Lukasz Konopielko, 1999. "Foreign Banks' Entry into Central and East European Markets: Motives and Activities," Post-Communist Economies, Taylor & Francis Journals, vol. 11(4), pages 463-485.
- Hans Degryse & Steven Ongena, 2002.
"Bank-Firm Relationships and International Banking Markets,"
International Journal of the Economics of Business,
Taylor & Francis Journals, vol. 9(3), pages 401-417.
- Degryse, H.A. & Ongena, S., 2002. "Bank-firm relationships and international banking markets," Open Access publications from Tilburg University urn:nbn:nl:ui:12-92220, Tilburg University.
- Janvier D. Nkurunziza, 2005. "Credit Can Precipitate Firm Failure: Evidence from Kenyan Manufacturing in the 1990s," Economics Series Working Papers WPS/2005-04, University of Oxford, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.