The effect of foreign market factors on the penetration of U.S. banks abroad
The past three decades have been characterized by significant growth in the international operations of United States (U.S.) banks. This is evidenced by the fact that the number of U.S. branch offices in international locations has more than doubled in the past 30 years. This study uses multiple regression analysis to identify the factors that determine U.S. bank penetration abroad. The level of U.S. bank penetration into foreign markets, the dependent variable, is measured by the total claims held by U.S. banks and their foreign offices in a particular country on a per capita basis. The independent variables used to test the model include economic, regulatory, and other country specific factors that may have an effect on U.S. bank penetration abroad. The results suggest that different factors influence U.S. banks' decisions to expand internationally. Banks are significantly affected by exchange rate fluctuations, growth in gross domestic product, and unemployment rates when expanding into developed countries. However, government regulation of the economy is significant when examining expansion into developing regions. The most important factor influencing the decision U.S. banks to expand internationally is foreign direct investment (FDI). Countries with a high level of FDI inflow from the U.S. consistently experience higher levels of U.S. bank penetration.
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Whyte, Ann Marie
Bachelor of Science (B.S.)
College of Business Administration
Business Administration -- Dissertations, Academic;Dissertations, Academic -- Business Administration;Banks and banking -- United States
Length of Campus-only Access
Honors in the Major Thesis
Van Camp, Kevin S., "The effect of foreign market factors on the penetration of U.S. banks abroad" (2001). HIM 1990-2015. 302.