The Determinants Influencing Foreign Banks’ Entry into Saudi Arabia

Abstract

The study investigates the determinants of foreign banks’ entry decisions into Saudi Arabia and their relative importance. Seventy-one questionnaires were analyzed using the Distribution Fitting Algorithmic Approach (DFAA). This paper is situated in the existing literature on the Internalization Theory, Eclectic Paradigm, and Follow-the-Customers hypothesis. While we confirm the Follow-the-Customers hypothesis, we also found that the host market’s characteristics influence entry decisions. We envisaged that this paper would not only contribute to the existing literature but also inform policymakers and industry participants to better understand foreign banks’ entry into emerging and developing markets. Keywords: Foreign banks, Determinants, Entry decisions, Saudi Arabia.