Business Commons^™

The Defensive Expansion Approach To Multinational Banking: Evidence To Date, Barry Williams

Barry Williams

This paper integrates the defensive expansion hypothesis in multinational banking with the internalisation approach to the multinational enterprise. This framework is then used to structure a review of the literature to date regarding the proposition that multinational banks follow their clients abroad, otherwise called the defensive expansion hypothesis. Both theoretical and empirical issues relevant to the study of the defensive expansion hypothesis are canvassed. The paper concludes that the defensive expansion hypothesis is best modelled using firm level data, and that investment measures are a preferred proxy for following clients. Furthermore, studies considering the defensive expansion hypothesis should control for …

How Good Is The Market At Assessing Bank Fragility? A Horse Race Between Different Indicators, Paola Bongini, Luc Laeven, Giovanni Majononi

Paola Bongini

For a sample of individual banks, active in the East Asian countries during the years 1995-1998, we explore the performance of three sets of indicators of bank fragility computed on the basis of publicly available information. We compare the behavior of traditional “early warning” indicators, based on balance sheet information, with that of implicit deposit insurance premia, based on the stock prices dynamics, and with the behavior of credit rating agencies’ assessments. We find significantly different patterns among the three groups of indicators in their ability of forecasting financial distress at both a specific point in time and through time. …

India’S Democracy Is Vibrant And Representational, Mohan Limaye

Mohan Limaye

Observers often note that democracy has been breaking out all over the world since the fall of the Soviet Union, but all democracies are not the same or equally genuine. Now is a good time to evaluate India’s democratic experiment because, after all, India earned its independence over 55 years ago and has been an active democracy ever since. In my judgment, India can justifiably congratulate itself on establishing and nourishing a genuine or authentic and vibrant democracy.

When average Americans think of India, they think of poverty, disease, illiteracy, corruption, and disorganization. They rarely, if at all, think of …