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Title: Foreign entry mode selection strategies in banking : an issue of control and resources
Author: Petrou, Andreas
ISNI:       0000 0001 3485 9233
Awarding Body: University of Warwick
Current Institution: University of Warwick
Date of Award: 1997
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The increase in foreign acquisitions and joint ventures, which have followed recent environmental changes in the banking sector, suggest that banks have modified their internationalization strategies. Motivated by this observation and the lack of research which could explain the foreign entry mode selection strategies of banks, this study has developed and tested a framework of foreign entry mode selection in banking. Drawing on existing literature, the study argues that managers select entry routes based on their desire for control and need for complementary resources. These motives are products of the evaluation of host country, target market and firm-specific factors. This two-stage model has been tested by collecting data through mailed questionnaires sent to 600 bank managers. Using multinomial logit and multiple regression, the validated data from 124 usable questionnaires were analyzed. The results suggest that bank managers' motives for control and resources can determine the selection of foreign direct investment (FDI) entry modes. Control motives differentiate greenfield investments and acquisitions from joint ventures, and resource motives differentiate acquisitions and joint ventures from greenfield investments. When both motives are considered together, one entry mode is determined. However, findings have shown that these motives are not a result of the evaluation of the foreign venture under investigation, rather, they reflect mangers' general preferences for control and resources. Drawing on these findings, this piece of research has proposed a single-stage model where these preferences are evaluated concurrently with factors related to the specific entry. Testing this model has shown that besides bank managers' general preferences for control and resources, host country risks, target market conditions and the bank's product and network strategies also influence the choice of entry modes. By considering both control and resource issues, this study has managed to integrate previous research on entry mode selection and comprehensively investigate all FDI entry modes. In addition, it has provided a paradigm of integration of the macro-level economic theories on internationalization of banking with firm-focused theories. This has been achieved by consolidating Dunning's eclectic theory with entry mode selection themes such as transaction cost analysis, barriers to entry, internationalization process and network coordination and configuration.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: HG Finance