The Internationalization Strategy of Financial Holding Companies in Taiwan
Date Issued
2005
Date
2005
Author(s)
Wang, Jing-Jiuan
DOI
zh-TW
Abstract
Having been joining WTO in 2002, the financial service industry in Taiwan faces a great competitive pressure from the entry of multinational financial service institutions. In order to cope with such competition, government policy aggressively promotes the establishment of financial holding companies (FHC) which could both increase operational scale advantages and enhance competitiveness through operational synergy. However, due to the increasing pressure of global competition and corporate customer’s demand toward global variety services, there is a decision imperative of the FHCs in Taiwan to be more internationalized.
The purpose of this research is to discuss the current internationalization development of the FHCs in Taiwan and strategic logic leading toward different business configurations. Our approach is to purposively select two major FHCs in Taiwan, upon which in-depth case studies are developed. With secondary information and interviews of key informants of these two case firms, we are able to depict the commonality and differences between case firms in their strategy logics of internationalization and selected entry modes. Moreover, we will indicate obstacles and key challenges of internationalization of FHCs in Taiwan.
This research found that the choice of niche market to internationalize is similar. However, the choice of entry mode will depend on the regulation, familiarity with local market, speed of entry, and the preferred control mode. In addition, the difficulties of internationalization that FHCs faced include the restricted regulations in host and home markets, client’s low degree of internationalization, less market coverage due to resource constraint, and insufficient human capital for international operations. Finally, this research suggests issues for further observations: (1) FHCs should build differentiation through offering customer benefits and achieving first-mover advantages; (2) Since FHCs don’t have enough ability to underwrite foreign securities, they may focus on their future development on brokerage business; (3) FHCs should well control risk when expanding internationally. Furthermore, the government in Taiwan must keep policies flexible to help FHCs catch the opportunities provided by CEPA to increase their competitive advantages.
Subjects
金融控股公司
Financial Holding Company
Internationalization
Foreign market Entry Mode.
Type
thesis
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