Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7373957 | The North American Journal of Economics and Finance | 2016 | 15 Pages |
Abstract
We study locational concentration and institutional diversification strategies in the context of foreign direct investment based on Dunning's eclectic paradigm in the banking industry. We report that locational concentration and institutional diversification strategies can enhance multinational bank return independently and simultaneously. Further, we document that locational concentration increases operational risk, while an institutional diversification strategy reduces this risk for a multinational bank. Our findings suggest that even when concentrating in a limited number of geographic locations, it is preferable to select more institutionally dissimilar countries. Overall, we conclude that multinational banks can achieve better performance by focusing on either locational concentration or institutional diversification, or a combination of both.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
I Han, Hsin-Yu Liang, Kam C. Chan,