International Expansion of Nigerian Banks Which Theories of Internationalization Prevailed?

Ebimo Amungo, Trevor Buck


This paper compares the internationalization pattern of Nigerian banks to the predictions of the theories of internationalization. The research sougt to identify factors that influenced the decision of Nigerian banks to establish international operations as well as those that determined their entry mode choices.

The study adopted a mixed qualitative and quantitative approach. Multiple case studies were used and five Nigerian banks were purposively sampled. Primary data was collected using Likert scale questionnaires and interviews, while secondary data was obtained from multiple sources. Primary data was analyzed using the normal distribution fitting algorithm approach.

The research found that expansion into foreign markets was triggered by the success of banking sector reforms in Nigeria, a shift in the strategic scope of the banks and a desire to exploit tangible and intangible assets in less developed, but profitable banking markets in sub-Saharan Africa (SSA). It was also found that environmental uncertainties in host countries influenced entry through high equity commitment modes. Furthermore, it was found that the internationalization of Nigerian banks conformed to the predictions of the eclectic theory, the resource-based-view and the views of scholars of the transaction cost analysis who propose hierarchies in host locations with high environmental uncertainties.

This study offers an idiosyncratic contribution to the study of bank internationalization.


Nigeria; banking system; internationalization

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