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The entry and exit decisions of foreign banks in Hong Kong
Author(s) -
Leung Man K.,
Young Trevor,
Fung Michael K.
Publication year - 2008
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1414
Subject(s) - ceteris paribus , underpinning , duration (music) , business , differential (mechanical device) , monetary economics , economics , microeconomics , art , civil engineering , literature , engineering , aerospace engineering
This paper presents a theoretical framework for explaining the entry and exit decisions of a firm, motivated by the differential returns in its home and a host market. Within this framework, the factors underpinning the entry and exit decisions of foreign banks in Hong Kong are examined, using a duration (accelerated failure time) model. It can be seen that a foreign bank, with international experience from having more overseas markets will take a shorter (longer) time to enter (exit) the Hong Kong market. Faster (slower) growth both in home trade with Hong Kong and in the Hong Kong banking sector itself will increase the likelihood of entry (exit). Ceteris paribus , Asian banks enter at a faster rate and survive longer in the Hong Kong market. Copyright © 2008 John Wiley & Sons, Ltd.