Banking across Borders
The study examines the internationalization strategies of the world’s largest banks between 1980 and 2000. These banks have dominated the internationalization of banking. For 44 banks, commonalities and differences are identified on the basis of a strategic typology developed for this study. The central research question deals with the effectiveness of internationalization. Using a self constructed internationalization database, differences are estimated between foreign and domestic performance, and the effects on shareholder return. A higher degree of internationalization has on average contributed negatively to bank performance. Similarly, shareholders have not gained by more internationalization. Banks who retreated from their internationalization or banks with a long established internationalization strategy generated the highest total shareholder return. Banks who (strongly) increased their internationalization generated the least returns. The study also addresses the future outlook for international banking - how will the internationalization of banks proceed? The potential for further financial deregulation in the home country, uncertainty on the international regulatory regime, and the business mix of the bank are likely drivers for the bank's future internationalization strategy and profitability enhancement.
|Keywords||European integration, Internationalization, banking, capital markets, deregulation, foreign activities, incentives, performance, profitability, shareholder return, strategy, valuation|
|Promotor||Tulder, R.J.M. van (Rob)|
|Sponsor||Erasmus University Rotterdam, Rotterdam School of Management. Promotores: Prof.dr. R.J.M. van Tulder, Prof.dr. D.M.N. van Wensveen Other Members: Prof.dr. C.G. Koedijk, Prof.dr. P.A. Stork, Prof.dr. L.I.E. Sleuwaegen|
Slager, A.M.H.. (2004, July). Banking across Borders (No. ERIM PhD Series;EPS-2004-041-ORG). Retrieved from http://hdl.handle.net/1765/1301