To What Extent Will the Banking Industry Be Globalized? A Study of Bank Nationality and Reach in 20 European Nations
38 Pages Posted: 29 May 2002
Date Written: May 2002
We model two dimensions of bank globalization - bank nationality (a bank from the firm's host nation, its home nation, or a third nation) and bank reach (a global, regional, or local bank) - using a two-stage nested multinomial logit model. Our data set includes over 2,000 foreign affiliates of multinational corporations operating in 20 European nations. We find that these firms frequently use host nation banks for cash management services, and that bank reach may be strongly influenced by this choice of bank nationality. Our results suggest limits to the degree of future bank globalization.
Keywords: Bank, Globalization, Europe, Mergers
JEL Classification: G21, G15, G28, G34
Suggested Citation: Suggested Citation