Foreign Bank's FDI: The Choice Between Greenfield Investment And M&A

Since 1980s, the process of financial globalization has been obviously accelerated, which is partly stimulated by the financial liberalization policy in many countries. Multinational Corporation enters into emerging market countries is an important content and display of globalization. As the main representative of emerging countries, Chinese government has been introducing foreign capital positively, which push large quantity of foreign banks go into China since 2001. The foreign banks mainly undertake the strategy of setting representative institutions or branches in 1990s, but along with further financial liberalization, foreign banks gradually change to the pattern of M&A.This paper based on the resource- based view of the firm, attempts to combine both internal and external environment, take the resource analysis inside bank as starting point, analyze the efficiency problem of multinational resource transfer in bank, which is mainly influenced by the bank itself and the policy in relevant countries. Then the author consider the international strategy of multinational bank and analyze the entry modes into a new country, on which base try to find out why multinational bank change their investment strategy in China——why they change the strategy from Greenfield investment (before China enter into WTO) to M&A (after China's accession to WTO). In the end, the author brings up with some suggestions for banks, which plan to enter into foreign countries in China.