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Information Costs, Institutional Distance, and Entry Mode Choice of Financial Intermediaries: Evidence from Central and Eastern Europe

Bhaumik, S, Pal, S and Owolabi, O (2016) Information Costs, Institutional Distance, and Entry Mode Choice of Financial Intermediaries: Evidence from Central and Eastern Europe [Working Paper]

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Abstract

In sectors such as financial intermediation, a multinational bank’s (MNB) ability to compete in a host country location depends on its access to information that are embedded in the relationships between local banks and their clients. Institutional distance between home and host countries of MNBs increases the verification costs of the quality of these embedded relationships (and hence the associated assets), and also makes it difficult for a MNB to balance its legitimacy between the two contexts. In this paper we develop hypotheses about the implications of information costs and institutional distance on entry mode choice of MNBs; the hypotheses find support in our empirical analysis.

Item Type: Working Paper
Subjects : Economics
Authors :
NameEmailORCID
Bhaumik, S
Pal, Ss.pal@surrey.ac.uk
Owolabi, O
Date : June 2016
Uncontrolled Keywords : Multinational bank; Entry mode choice; Bank-client relationship; Verification cost; Informal contracts; Institutional distance
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:39
Last Modified : 24 Jul 2018 08:20
URI: http://epubs.surrey.ac.uk/id/eprint/821097

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