Bank Internationalisation: An Examination of the Role of Government and Home Institutions in Emerging Economies

Abstract

Purpose

Over the past decade internationalisation by banks from emerging market economies has accelerated. The purpose of this study is to examine the role of government and home country institutions in the international expansion process of Chinese commercial banks (CCBs).

Methodology/approach

By employing qualitative research method, data was collected via interviews from 30 senior managers based on a sample of 10 CCBs involved in international expansion over the 2001–2013 period.

Findings

The study finds that the Chinese government and home institutions play an important role in motivating CCBs’ internationalisation. Evidence from this research illustrates the effect institutional factors have in emerging economy firms’ internationalisation.

Practical implications

The managerial implication of these findings is that CCBs could take great advantage of government policy by developing proper internationalisation strategies and capabilities that would enhance CCBs’ competitiveness in global market. On the institutional front, removal of the institutional constraints imposed on Chinese banking industry is required. Using market-oriented management and regulatory rules rather than imposing administrative restrictions could therefore accelerate CCBs’ adaption and integration in the international market and enhance their competitive power.

Citation

He, W., Ring, P. and Boateng, A. (2016), "Bank Internationalisation: An Examination of the Role of Government and Home Institutions in Emerging Economies", The Political Economy of Chinese Finance (International Finance Review, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 271-293. https://doi.org/10.1108/S1569-376720160000017016