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Entry Mode Choice of Multinational Banks

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  • Lehner, Maria

Abstract

When expanding abroad, a multinational bank faces a trade-off between accessing a foreign country via cross border lending or a financial foreign direct investment, i.e. greenfield or acquisition entry. We analyze the entry mode choice of multinational banks and explicitly derive the entry mode pattern in the banking industry. Moreover, we show that in less developed banking markets, a trend towards cross border lending and acquisition entry exists. Greenfield entry prevails in more developed markets. Furthermore, we identify a tendency towards acquisition entry in small and towards greenfield entry in larger host countries.

Suggested Citation

  • Lehner, Maria, 2008. "Entry Mode Choice of Multinational Banks," Discussion Papers in Economics 8222, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenec:8222
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    References listed on IDEAS

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    Cited by:

    1. Caterina Giannetti & Nicola Jentzsch & Giancarlo Spagnolo, 2010. "Information Sharing and Cross-border Entry in European Banking," CEIS Research Paper 178, Tor Vergata University, CEIS, revised 21 Dec 2010.

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    More about this item

    Keywords

    foreign bank entry; multinational bank; cross border lending; greenfield entry; acquisition entry;
    All these keywords.

    JEL classification:

    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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