Business expansion and firm efficiency in the commercial banking industry: Evidence from the US and China

Feng Wang (), Minxue Huang () and Zhigang Shou ()

Asia Pacific Journal of Management, 2015, vol. 32, issue 2, 569 pages

Abstract: Despite a consensus that business expansion drives firm effectiveness, extant literature has neglected the exact relationship between business expansion and firm efficiency. Using secondary data from the US and Chinese banking industries, this study explores two efficiencies of exploratory expansion (i.e., investing in new business, outside the scope of the firm’s existing business) and exploitative expansion (i.e., expanding target markets in the existing business)—profitability and marketability. The empirical results reveal that exploratory expansion decreases profitability but increases marketability. Meanwhile, exploitative expansion has no significant effect on profitability, but it can increase marketability. Furthermore, the study reveals that Chinese banks are likely to benefit more from exploratory expansion, whereas US banks would benefit from exploitative expansion. Copyright Springer Science+Business Media New York 2015

Keywords: Exploratory expansion; Exploitative expansion; Profitability; Marketability; US and Chinese banking industry (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10490-015-9408-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:32:y:2015:i:2:p:551-569

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10490/PS2

DOI: 10.1007/s10490-015-9408-1

Access Statistics for this article

Asia Pacific Journal of Management is currently edited by Jane Lu

More articles in Asia Pacific Journal of Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().