Economic Themes (2012) 50 (4) 8, 555-570


Srđan Marinković, Isidora Ljumović

Abstract: The paper explores the strategic choice of banks to enter foreign markets: their motives and modes. Moreover, it reviews the case of foreign banking in Serbia, with special attention to the strategy of entry and business performance, which make us able to assess whether the realized performance met the expectations. There is found rather mixed support of foreign banks superior performance. Although inconsistent with the theory, it is in line with some other empirical investigations. This might be because the Serbian banking industry was constantly reshaping within the last decade, with most foreign banks operating no more than a couple of years. It happened that late entrants had to catch up with foreign banks that came early and up to that time took over a lion share of the market. The employed methodology gives no conclusive result about relative performance of foreign vs. domestic banks, but it rather states that foreign ownership per se does not guarantee better performance.

Keywords:  banking industry; internationalization; foreign banks; business performance

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