Executive expectation in the internationalization process of banks The study of two Swedish banks foreign activities

Sammanfattning: Since the late 1980s, deregulation of the banking sector has opened new avenues for the internationalization of banks. There are, however, few studies on the internationalization of banks – particularly Swedish banks. The purpose of this thesis is to deepen our knowledge of bank’s internationalization process by studying how the executive function’s expectation of market conditions influences internationalization patterns. This thesis makes an empirical contribution by describing how the Swedish banks Svenska Handelsbanken AB and Swedbank AB have internationalized during the period 1995-2014. The empirical evidence comprises all of the two banks’ activities in foreign markets and the qualitative cases describing this process have been constructed using archival data (newspaper articles, press releases, and reports) complemented with interviews.Beside the empirical contribution the thesis makes a theoretical contribution to internationalization theory and more specifically to Johanson and Vahlne’s (1977) internationalization process model. While Johanson and Vahlne’s model does have a strong explanatory value, it does not fully explain its mechanisms (Andersen, 1993; Leonidou & Katsikeas, 1996) and only firm’s internationalizing incrementally (Liesch et al., 2002). For explanation of both incremental and non-incremental behaviors this thesis provides a proposed view of bank’s internationalization where the concept of executive expectation is developed as a mediating variable in Johanson and Vahlne’s internationalization process model. To this end, executive expectation is described as the driving and hindering force in bank’s internationalization process influenced by exogenous and endogenous changes.