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Modeling firm specific internationalization risk: An application to banks' risk assessment in lending to firms that do international business
KTH, School of Architecture and the Built Environment (ABE), Centres, Centre for Banking and Finance, Cefin. Stanford University, USA.
2014 (English)In: International Business Review, ISSN 0969-5931, E-ISSN 1873-6149, Vol. 23, no 6, 1074-1085 p.Article in journal (Refereed) Published
Abstract [en]

Drawing on internationalization process theory, we develop a new model for firm-specific internationalization risk assessment. The model shows that firm-specific internationalization risks can be determined from a firm's experiences and from current business activities in a firm's network. Experiential risks are categorized as international, country market, network, or relationship experience risks. Risk assessment in current network activities can be determined from a firm's dependency on a network and from the network's performance and evolution. We apply our model to credit risk assessment by banks and other credit institutions. This article adds to research on financial institutions' credit risk assessment by focusing on firm-specific internationalization risk assessment, an area that has previously received little attention in the literature. In addition, this article provides a better understanding of risk assessment in the internationalization process, shedding light not only on the risks involved in firms' commitment to internationalization but also on the risks that banks and other institutions take when they commit by lending to internationalizing firms.

Place, publisher, year, edition, pages
2014. Vol. 23, no 6, 1074-1085 p.
Keyword [en]
Bank, Experience, Internationalization, Network, Process, Risk assessment
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-156101DOI: 10.1016/j.ibusrev.2014.06.011ISI: 000343391300005Scopus ID: 2-s2.0-84923261514OAI: oai:DiVA.org:kth-156101DiVA: diva2:778262
Note

QC 20150109

Available from: 2015-01-09 Created: 2014-11-21 Last updated: 2017-12-05Bibliographically approved

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  • apa
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  • vancouver
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More styles
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  • de-DE
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  • Other locale
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