Does foreign bank entry make Chinese banks stronger?

Yin, Yingkai and Zhang, Yahua and Zhang, Xiaotian Tina and Hu, Fang (2015) Does foreign bank entry make Chinese banks stronger? Global Economic Review , 44 (3). pp. 269-285. ISSN 1226-508X

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Abstract

China has encouraged its domestic banks to introduce foreign investment since the early 2000s. In the meantime, China has gradually fulfilled its WTO accession commitment to give foreign banks the same treatment as their Chinese counterparts in the last decade. This research has examined the effects of the two modes of foreign bank entry, namely, minority ownership participation, and setting up branches and subsidiaries, on the performance of Chinese banks. Our results suggest that there is no systematically significant impact of the minority ownership participation on the performance indicators of Chinese banks. However, it appears that the physical presence of foreign banks has been a significant driver for domestic banks to improve profitability and efficiency. Opening the country to foreign banks appears to have made Chinese banks stronger and more competitive.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Submitted version deposited in accordance with the copyright policy of the publisher.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 16 May 2016 00:17
Last Modified: 22 Feb 2017 01:35
Uncontrolled Keywords: Chinese banks; foreign bank entry; minority ownership; bank performance
Fields of Research : 14 Economics > 1402 Applied Economics > 140207 Financial Economics
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910203 Industrial Organisations
Identification Number or DOI: 10.1080/1226508X.2015.1055779
URI: http://eprints.usq.edu.au/id/eprint/28172

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