Resource based view of internationalization: evidence from Indian commercial banks

Abstract

Purpose – The purpose of this paper is to understand the influence of internal resource drivers on internationalization of commercial banks. Design/methodology/approach – Panel data on 46 Indian commercial banks from 2008 to 2012 were collected from secondary sources to measure how assets size, human resources, branding and advertising, ownership and age influence the international diversification of the commercial bank. Internationalization of the commercial bank was measured in terms of international advances intensity, international borrowing intensity and number of countries served. Regression models were designed with controlled multicolinearity, heterogeneity and exogeneity. Findings – Higher assets’ size, higher human resources, private ownership and higher organizational age led to internationalization of Indian commercial banks. However, higher branding and advertisement expenses and state ownership were found to be negatively related to international diversification. Originality/value – Internationalization is one of the growth strategies of a firm which cannot be unified and generalized due to resource heterogeneity. So this necessitates a large number of studies sector-wise, sub-sector-wise, product-wise, industry-wise and region-wise. There is a dearth of literature on resource view of internationalization of commercial banks. So, this Indian study adds a new finding on resource-based view of internationalization to the existing body of knowledge.