Organizational Identity as an Antecedent of International Expansion: The Internationalization Challenge of South Africa Banks

33 Pages Posted: 21 Jun 2019 Last revised: 14 Aug 2019

See all articles by Lilac Nachum

Lilac Nachum

City University of New York - Allen G. Aaronson Department of Marketing & International Business

Abdullah Verachia

University of Pretoria - Gordon Institute of Business Science

Date Written: June 15, 2019

Abstract

The possession of intangible assets has long been assumed as the major driver of international expansion and the factor that gives rise for the multinational company. The growth trajectory of South Africa banks does not conform with this theoretical prediction. In spite of the evident possession of vast and powerful stock of intangible assets, coupled with the presence of powerful pull and push factors for international expansion, these firms have remained predominantly domestic, with small and meager activity outside their home country. Exploratory study of these banks suggests that their organizational identity, with its antecedents in the characteristics of the home country, has been confining their ability to observe opportunities outside the home country and develop the capabilities required to exploit them. We develop a theory of the impact of organizational identity on international growth and suggests that it has to be recognized in MNE theory as a critical condition for international growth.

Keywords: identity theory, South Africa, banks, internationalization, home country impact

JEL Classification: M16, M14, M21

Suggested Citation

Nachum, Lilac and Verachia, Abdullah, Organizational Identity as an Antecedent of International Expansion: The Internationalization Challenge of South Africa Banks (June 15, 2019). Baruch College Zicklin School of Business Research Paper No. 2019-06-06. Available at SSRN: https://ssrn.com/abstract=3404573 or http://dx.doi.org/10.2139/ssrn.3404573

Lilac Nachum (Contact Author)

City University of New York - Allen G. Aaronson Department of Marketing & International Business ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Abdullah Verachia

University of Pretoria - Gordon Institute of Business Science ( email )

Lynnwood Road
Pretoria 5100
South Africa

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