Research On The Foreign Banks Operating Mode And Its Influence Under The Global Economic Integration Based On Foreign Banks Empirical Research In China

The multinational banks have played an irreplaceable role in the globalization of the world economy development. In order to satisfy the business developing requirement of domestic enterprises and foreign corporations, more and more large commercial banks began to engage in cross-border banking business. Because of the enormous profit opportunities from the Chinese economic development, a large number of foreign banks have entried into the local banking market after the China jointed the World Trade Organization at 2001. At the early stage of foreign banks comprehensive entry into the Chinese banking market, the trade-off between relaxation and control of regulatory policy, the variety differences of management and operating between foreign banks and the local banks, which make the researches on the influence of foreign banks to the local banks and the organization forms and the operating mode under the current regulatory policy valuable.Based on the reviews and summary of the past literatures, this paper will research on the following questions with the combination of the relative operating characteristics with respect to the Chinese banks and foreign banks. The first question is the influence research of foreign banks to the local banks in customs competition and risk screening technology. The second one is the research of foreign banks'organization forms under the locally foreign banks regulatory policy. And the last one is the research of the institution quality and the latent cost constrains to foreign banks operating behavior and efficiency. It mainly includes the following distinctive research work and conclusions:Firstly, it constructs a theoretical model to analyze the customs lending competitions influence of foreign banks to the local banks with respect to information asymmetry and difference operating cost using signal game model under the conditions of the fully open of financial sector. And the paper uses 18 local banks'panel data to test the theoretical results.The reaearch shows that the best choice of the Chinese bank is to maintain its existing old borrowers'cooperation. The Chinese bank's credit market of new borrowers will present"Lemon Effect", when the foreign banks offer separating contracts to borrowers. And if foreign banks offer pooling contracts to borrowers, Chinese bank will lose all of the new borrowers. And foreign banks may gain part of the old borrower in terms of reducing a little profit.Secondly, it constructs a theoretical model to analyze the influence of local banks' risk control ability based on risk contral technology and technology spillover. It shows that it is the only way to promote local banks actively implement technology transfer, increase the operating efficiency of local banks by encouraging foreign banks enter the market with an appropriate risk-control capability gap to local banks'and implementing appropriate risk control technology. It also finds that the entry of foreign banks with high level of risk control technology will reduce the lending rate. As a result, in order to improve the domestic banks'risk control technology, it is necessary to encourage the domestic bank transferring the technology or encourage foreign banks with an appropriate technology gap to the domestic banks entering into the market.Thirdly, it presents a real option method of the local-incorporation requirement for foreign banks'value to analyze the micro-mainbody impact factors and an empirical study. The study finds that the operating cost control ability and the retail business scale before restructuring and the banking net income and the asset scale regulation after restructuring are the key factors influencing foreign bank branches reforming to subsidiaries.Fourthly, it analyzes the organization forms strategy and its influence factors of foreign banks under the policy of local-incorporation requirement and the policy of foreign holding share in the current banking reforming. It presents an organization strategy which reflects the influence of the pioneering advantage and the potential development of the local market. Its results show that the local market potential development opportunity and pioneering advantage and the relative financing cost of foreign bank are the important influence factors to foreign banks organization forms. Its empirical study shows that the policy of foreign banks holding share may raises the risk control ability of the local banks. However, foreign banks obtain market opportunities from the local economic development by holding the local banks'share.Finally, it innovatively introduces the latent cost and institutions quality into the foreign bank operating mode game analysis model. It identifies the foreign bank by its behanvior which is divided into opportunism foreign banks and honest banks. It reveals the reasons about the profitability differences between foreign banks with the same parent bank in different countries and local banks. Then it uses 73 Chinese and foreign banks'non-balance panel data to carry on the empirical study. It suggests that the profit chance is a crucial factor influencing foreign banks operating mode and profitability at low level of institution quality. The difference of risk management technology is the major factors influencing the profits differences of opportunism foreign banks and private banks. In addition, the profit difference between honest foreign banks and honest private banks is also influenced by latent cost and the travel cost of depositors. At high level of institution quality, the risk management technology is an important factor to determine their operating mode and profitability of foreign banks. The financing mode of the honest banks is influenced by the relative financing cost. The financing mode of the opportunism banks is additionally inflenced by the institution quality.