Internalization and experience: Japanese banks’ international expansion, 1980–1998

We use an interdisciplinary approach to investigate multinational banks’ foreign activities. We bridge core concepts from the stages theory of internationalization to internalization theory, to extend the literature on the defensive expansion hypothesis. Unlike the primarily aggregate levels of analysis employed in previous research on multinational banking, we utilize a firm-level analysis of the internationalization experiences of 21 Japanese banks in the period 1980–1998. We find that banks undertake foreign direct investment to secure internalization benefits by following their existing clients, and to achieve economies of scale in the application of their intangible assets in international markets. The magnitude of these relationships, however, is contingent upon the level of a bank's experience in the host countries. Consistent with predictions from internationalization theory, we find that the motivations for international expansion can change over time. Journal of International Business Studies (2008) 39, 231–248. doi:10.1057/palgrave.jibs.8400317

Environmental influences on MNE subsidiary roles: economic integration and the Nordic countries

We seek to examine the importance of environmental factors in determining MNE subsidiary roles. In particular, we examine the environmental factors associated with ‘deep’ integration schemes such as the EU. Such schemes require a convergence of economic structure, due to the establishment of common regional institutions, regulations and policies. Specifically, we distinguish between the scope of activities performed by subsidiaries, and the level of competence of those subsidiaries. The empirical analysis is based on a large-scale survey of foreign-owned units in Denmark, Finland and Norway. These Nordic countries differ with regard to their EU-membership status – Norway being the ‘outsider’, while the others are members – but are very similar to each other in most other respects. Our data show that subsidiaries in Norway report significantly lower scores for both scope of activities and levels of competence. The effects remain strong even when we are controlling for other potentially influential factors. The findings indicate that being on the ‘outside’ of the EU may indeed carry the price of becoming less attractive to MNE activity. Journal of International Business Studies (2003) 34, 443–456. doi:10.1057/palgrave.jibs.8400047