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Degree of Internationalization and Performance: An Analysis of Canadian Banks

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The international business literature measures the link between the degree of internationalization (DOI) of a firm's activities and its performance. The results of this literature are mixed. The authors extend the analysis to Canadian bank-level data, but they also take into account the riskiness of each bank's foreign-asset exposure. The results establish a positive, but weak, relationship between DOI and performance—one that is dependent on each bank's risk profile. The authors discuss the policy implications of their analysis.

JEL Code(s): F, F2, F23, G, G2, G21