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Journal of International Business Studies

, Volume 39, Issue 3, pp 406–427 | Cite as

The performance implications of relationship banking during macroeconomic expansion and contraction: a study of Japanese banks' social relationships and overseas expansion

  • William P WanEmail author
  • Daphne W Yiu
  • Robert E Hoskisson
  • Heechun Kim
Article

Abstract

We propose a social perspective emphasizing the opportunities and constraints of bank–firm relationships to understand the determinants of relationship banks' performance, using Japanese banks to test our theory. Using social exchange and role theories, we found banks that have strong social relationships performed differently during Japan's macroeconomic expansion and contraction cycles. However, our results indicate that social exchange and role relationships are context-specific: banks benefited from internationalization during a domestic macroeconomic expansion as a result of their home-country social relationships, but they were less constrained by the same social relationships in their international operations during a domestic macroeconomic contraction.

Keywords

relationship banking comparative corporate governance social exchange and role business groups Japan keiretsu 

Notes

Acknowledgements

The authors would like to thank departmental editor Lorraine Eden and the four anonymous reviewers for their valuable comments on this article. In addition, we are grateful for the feedback on earlier versions of this article by Andrew Delios, Andrew Inkpen, and Shige Makino.

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Copyright information

© Academy of International Business 2008

Authors and Affiliations

  • William P Wan
    • 1
    Email author
  • Daphne W Yiu
    • 2
  • Robert E Hoskisson
    • 3
  • Heechun Kim
    • 3
  1. 1.Area of Management, Rawls College of Business, Texas Tech UniversityLubbockUSA
  2. 2.Department of ManagementChinese University of Hong Kong, ShatinHong Kong
  3. 3.Department of ManagementW. P. Carey School of Business, Arizona State UniversityTempeUSA

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