Internationalization of multinational banks: a study of foreign direct investment in seven Latin American countries

The article attempts to explore and contrast the different factors that influence the foreign direct investment (FDI) decisions of multinational banks. Employing eclectic theory, an estimation model with panel data from seven Latin American countries is set to test the proposed hypotheses. The results highlight an increase in foreign assets, removal of banking restriction, banking concentration, and capital cost differential in the local banking system as determinants of specific location advantages for attracting banking FDI. Other factors such as cultural proximity and crisis also have a significant impact on banking FDI. Discussions and implications are debated before conclusions are drawn for a future research agenda.