Title: Multinational Banking and the Theory of Internalization
Abstract: This chapter applies the theory of internalization to explain the activities of international banks. It has already been established that multinational banks have stable earnings, see Rugman (1979) Chapter 12 and Khoury (1980). What are the reasons for such a good performance? Are they to be found in the international environment, external to the multinational bank, or are they internal? Here it is argued that the latter explanation of earnings stability is of great importance. Indeed, the theory of internalization, used successfully in analysis of the multinational enterprise elsewhere in this book, can also be applied to the activities of multinational banks. It is shown here that multinational banks act as vehicles for the internalization of imperfections in international financial markets and that they provide specialized information services which are not otherwise available to multinational enterprises.KeywordsMultinational EnterpriseInternational DiversificationDomestic BankInternational Financial MarketForeign OperationThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
Publication Year: 2006
Publication Date: 2006-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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