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Does foreign strategic investment transfer management knowledge to local Chinese banks?

Does foreign strategic investment transfer management knowledge to local Chinese banks? Purpose – The purpose of this paper is to analyze whether, and how, foreign strategic investor entry to China conveys management expertise to domestic banks. Some observers are concerned that foreign investors will be reluctant to transfer their expertise to local partners, and few skills will be acquired by Chinese banks. At the same time, the trade‐off between China's access to banking skills and foreigners' access to Chinese customers will overwhelmingly favour the foreigners. Design/methodology/approach – The discussion is based on authentic cases collected from the China Banking Regulatory Commission, various banks annual reports, and the China Financial Development Report. Cross‐border management knowledge transfer from global banks to emerging economies is the theoretical framework for analyzing strategic investment in bank cases. Findings – The paper finds that there are some successes of management knowledge transfer from such investment, although foreign strategic investment is limited as a minority share in each local bank. Culture shock came at the first stage and syncretism later on. Originality/value – The cultural shock and rigidity of traditional conception are an impediment in the transfer process. This paper shows that the initial conflict can be avoided. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Chinese Management Studies Emerald Publishing

Does foreign strategic investment transfer management knowledge to local Chinese banks?

Chinese Management Studies , Volume 2 (2): 11 – Jun 13, 2008

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-614X
DOI
10.1108/17506140810882261
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to analyze whether, and how, foreign strategic investor entry to China conveys management expertise to domestic banks. Some observers are concerned that foreign investors will be reluctant to transfer their expertise to local partners, and few skills will be acquired by Chinese banks. At the same time, the trade‐off between China's access to banking skills and foreigners' access to Chinese customers will overwhelmingly favour the foreigners. Design/methodology/approach – The discussion is based on authentic cases collected from the China Banking Regulatory Commission, various banks annual reports, and the China Financial Development Report. Cross‐border management knowledge transfer from global banks to emerging economies is the theoretical framework for analyzing strategic investment in bank cases. Findings – The paper finds that there are some successes of management knowledge transfer from such investment, although foreign strategic investment is limited as a minority share in each local bank. Culture shock came at the first stage and syncretism later on. Originality/value – The cultural shock and rigidity of traditional conception are an impediment in the transfer process. This paper shows that the initial conflict can be avoided.

Journal

Chinese Management StudiesEmerald Publishing

Published: Jun 13, 2008

Keywords: Knowledge transfer; International investments; China; Strategic alliances; Commercial banks

References