SIZE, PRODUCTIVITY, AND INTERNATIONAL BANKING Introduction

This article is about the relationship between size, productivity and international banking practices. The writer states that large firms are more productive and engaged in exports and foreign direct investment as compare to small firms. Domestic fixed costs are lower than the fixed costs of exporting, which are lower than the fixed cost of foreign direct investment, thats why small firms go for the domestic operations instead of exports and foreign direct investment. Author explains this paper in three ways. First, author states that, the German banks are heterogeneous in terms of size and lending to the customers. They also examine the effects of size heterogeneity for bank internationalization. Second, they tells about the similarities and differences between manufacturing firms and services firms internationalization. On third point, they show that how every bank is different from another in financial services and FDI. They show that how size and productivity related to the entry modes (FDI or domestic).

Significance of Research
This study shows the relationship among size, productivity, and internationalization activities by banks. They investigate the relationship among productivity, size, and international activities of German banks. They classify banks according to modes of foreign activity, and size classes are based on the domestic customer lending and total asset distribution. This study indicates the need of model of international trade in financial services.

Sample for the Research

Authors select the sample for the research that is comprises of 2226 German banks, their foreign branches, and their foreign subsidiaries for 63 countries. They use the data for the research that belongs to years 2002-06.

Research methodology
This is a qualitative type of study. In this study researcher focus on the understanding and explaining the relation between size, productivity and international banking practices. They use the statistical techniques as well to understand and interpret the relation.

Findings
This study gives detailed and sound arguments about the relationship among size, productivity, and internationalization activities by banks. They state that size and productivity distributions have no sufficient effect on each other. They argue that the larger banks are more productive as compare to smaller banks. They find that the small banks are also engaged in the foreign investment. These small banks also have foreign assets and even unproductive banks also have presence abroad