Foreign multinational banking in Malaysia: trends, motives and activities

Abstract

Purpose – The aim of this paper is to analyse and examine the factors affecting the international expansion and market entry of foreign multinational banks (MNBs) in Malaysia. While relevance of the theoretical perspectives is highlighted, the purpose of this paper is to contribute to the understanding of the present‐day phenomenon of emerging multinational banks. Design/methodology/approach – The paper employs multi‐method approaches combining both questionnaires survey data and qualitative interviews. Findings – The findings reveal the fact that profitability, trade financing, following the customers, diversifying the risk and pursuing new market opportunities are among important factors for the presence of foreign banks in the country. Research limitations/implications – The paper highlights relevance of further research on multinational banking and outlines research avenues. Practical implications – The paper offers important insight and practical implications for local regulators and policy makers and bankers to understand the behaviour of foreign multinational banking in emerging markets. Originality/value – The objective of this paper is to fill in some gaps in the literature regarding this research area. The paper provides preliminary research evidence and a framework to suggest hypotheses for further research. Keywords Multinational banking ,Malaysia, Internationalization, Entry mode strategy, Service sector