The Internationalisation of Foreign Financial Service Companies in China: The Importance of Strategic Alliances between Foreign and Chinese Domestic Banks

Burkelc, Tadej (2011) The Internationalisation of Foreign Financial Service Companies in China: The Importance of Strategic Alliances between Foreign and Chinese Domestic Banks. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

Internationalisation of service industry has attracted considerable less attention in theoretical literature than manufacturing sector. As a result, the knowledge about internationalisation of service industry is based on the facts and understanding of manufacturing sector, though there is no consensus among researchers whether the generalisation of service and manufacturing sector is possible or it must be adopted specifically for service sector industry. Despite the importance of service industry in the global economy, scholars that have investigated internationalisation of service industry have mainly concentrated on industry specific internationalisation, such as consultancy, tourism, or financial industry.

The present dissertation attempts to fill the gap and research the strategy foreign banks adopt when entering Chinese market. In recent years we have been witnessed significant liberalisation of Chinese banking system and, consequently, many foreign banks have decided to enter newly and highly developing Chinese market. In principle, foreign banks have four options of how to enter Chinese banking market: setting up a branch or subsidiary, establishing foreign-Chinese JV, establishing WOS, or purchasing equity in Chinese banks. Many of those foreign banks have also entered into strategic alliance with Chinese domestic banks and/or companies. This trend, however, has been very popular worldwide in recent years and the number of strategic alliances has increased dramatically, including in the financial service industry.

The aim of the dissertation is to find out whether entering into strategic alliance has an important impact on foreign banks’ performance. From the sample of 21 foreign banks in China that have been chosen according to five criteria, the author concludes that foreign bank with a strategic alliance with Chinese domestic bank in average does not perform better (in terms of ROA, ROE and NIM) than banks without a strategic alliance or vice versa as the both groups of banks report comparable level of performance. Consequently, there is insufficient evidence to conclude that there are significant differences in performance between foreign banks in China that have a strategic alliance with Chinese domestic banks and foreign banks without a strategic alliance.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 25 Apr 2012 15:20
Last Modified: 24 Oct 2016 17:32
URI: http://eprints.nottingham.ac.uk/id/eprint/24947

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