Choice of Entry Modes by Foreign Banks with Efficiency Barriers

• Main Author: 郭芳彰
• Other Authors: Cheng, Li-Ping
• Format: Others
• Language: en_US
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/62478841921939847378

碩士 === 國立交通大學 === 財務金融研究所 === 98 === The increasing liberalization of financial markets has stimulated the presence of foreign bank entries. While making entry mode decisions, besides the efficiency of foreign banks, the conditions of host country are major considerations for foreign banks. In this thesis, I set up a theoretical model along a circular city to analyze the entry mode choice of Greenfield investment, joint venture and acquisition. By using Matlab to conduct numerical simulations, I find that benefit of soft information, efficiency barriers and relative efficiency are three major determinants to the entry modes choice. Foreign bank choose joint venture, Greenfield investment and then acquisition as its efficiency increases. Moreover, a less developed market is associated with more foreign bank entries. Bigger market size generally encourages foreign bank entry via Greenfield investment.