Multinational Banking in China

Multinational Banking in China

Theory and Practice

New Horizons in International Business series

Chen Meng

Multinational Banking in China examines key issues in the market entry and development of foreign banks in the People’s Republic of China using data collected from 37 in-depth interviews and questionnaire surveys.

Chapter 8: Summary and Conclusions

Chen Meng

Subjects: asian studies, asian business, business and management, asia business, international business


Chapter 1 identifies six key issues in the analysis of banking internationalization. They are motivation, mode of control, determinants for market entry, development strategy, management and adaptation, and competitive advantages. Policy and host country environment greatly affect the market entry. Learning and cultural differences are crucial elements in the adaptation and development of foreign banks. Interrelations of these variables are of great importance and will be highlighted in this final chapter. Chapter 2 develops a theoretical framework using internalization theory as a synthesizing element and integrates other theoretical concepts from strategy literature. Emphasizing knowledge as a key factor that drives the growth of banks, we rely on primary data collected from subsidiary level to examine the dynamics of banking internationalization in China’s emerging economy. Our findings and our contribution to the existing literature must be taken within the specific circumstances of our empirical investigation. The sample is drawn from 37 in-depth interviews and 60 postal questionnaire surveys of 178 foreign banks in China. Banks from different nations operating at different modes (representative office, branch, subsidiary and JV) are included in our sample, which provides triangulation of all findings. We can be confident of the robust and reliable nature of our results. This conclusion encapsulates our findings on the identified key issues. STRATEGIC MOTIVES Foreign banks exhibit a mix of motives including both market seeking and following the client and other motives of which driven by competition, being the first mover, geographical...

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