The Impact Of Foreign Banks On International Trade

The global financial crisis caused by the subprime mortgage crisis in the United States has brought the international financial market to a standstill and seriously disrupted international trade.Since then,researchers began to emphasize the importance of the relationship between finance and trade,as well as the financial and economic interdependence of countries around the world,and studied the relationship between financial globalization and trade integration.At the same time,the crossborder transfer of bank capital has triggered a discussion about whether foreign banks can contribute to domestic financial stability and international trade.Although studies have shown that the improvement of the level of domestic financial development and financial internationalization can promote international trade,whether foreign banks have a positive impact on international trade,and through which channels to have an impact on international trade is still little known.Especially under the background of the gradual transformation of Sino-US economic and trade friction from the first stage of mutual exploration to the second stage of omni-directional game,in the new situation of the continuous emergence of deep-seated obstacles and the gradual emergence of external pressure in the implementation of the "Belt and Road Initiative",it is particularly necessary to study the impact of foreign banks on the international trade between the countries along the "Belt and Road Initiative" and the United StatesCanada-Mexico from the perspective of financial globalization.Based on this research purpose,this dissertation discusses the impact of foreign banks on international trade from the perspectives of external financing,information exchange and trade risk on the basis of existing research.and take the countries along the "Belt and Road Initiative" and the United States-Canada-Mexico as the research object,in order to provide new evidence for the relationship between financial integration and international trade.Based on the relevant statistical data of the countries along the "Belt and Road Initiative" and the United States-Canada-Mexico,this dissertation first combs the development of foreign banks in the countries along the "Belt and Road Initiative" and the United States-Canada-Mexico,in order to understand the time and regional characteristics of the development of foreign banks,especially those owned by the United States-Canada-Mexico,in the countries along the "Belt and Road Initiative" route.Then,it analyzes the trade development between the countries along the "Belt and Road Initiative" route and the United States-Canada-Mexico,and calculates the trade competitiveness and trade complementarity between the countries along the "Belt and Road Initiative" route and the United States-Canada-Mexico.Then,the stochastic frontier gravity model of trade inefficiency is constructed to study the trade potential and its influencing factors of the countries along the "Belt and Road Initiative" and the United States-Canada-Mexico respectively from the overall level,industry level and regional level.it also makes a comparative analysis of trade efficiency and trade potential from a dynamic and regional perspective.It is found that the trade competitiveness and trade complementarity between the countries along the "Belt and Road Initiative" route and the United States-Canada-Mexico are low,the trade potential is high,and there is a negative correlation between the trade potential and the income level of the countries along the "Belt and Road Initiative" route as a whole.and there are great differences in trade potential among different categories of export products.In order to reveal the influence path of foreign banks on international trade,by combing the relevant literature,it is found that foreign banks can increase the availability of external financing for enterprises in the host country directly or indirectly.It can also help enterprises in the host country to overcome the problem of information asymmetry to promote the flow of information of import and export enterprises.It can also help enterprises of the host country to solve the difficulties in the implementation of contracts in international trade and reduce the trade risks of both sides of the transaction.Therefore,this dissertation chooses the perspective of external financing,information exchange and trade risk,and uses the relevant data of 56 countries along "Belt and Road Initiative" and the United States-Canada-Mexico to test the impact of foreign banks on import and export trade.The empirical results show that foreign banks,especially those owned by the United States-Canada-Mexico,overcome the problem of information asymmetry in international trade by providing external financing to the import and export enterprises of the countries along the "Belt and Road Initiative" route.And reduce the risks in international trade,and facilitate the import and export trade between the countries along the "Belt and Road Initiative" and the United StatesCanada-Mexico.In order to further test whether foreign banks can have an impact on the trade relations between the countries along the "Belt and Road Initiative" route and the United States-Canada-Mexico,trade competitiveness,trade complementarity and trade potential are used as the explained variables to measure the trade relations between the two places.Similarly,through external financing channels,information exchange channels and trade risk channels,this dissertation studies the relationship between foreign banks and trade competitiveness,trade complementarity and trade potential.The results show that the proportion of foreign banks and the level of financial development in the countries along the "Belt and Road Initiative" route,it can improve the trade competitiveness,trade complementarity and trade potential of industries that rely on external financing,industries with opaque information,industries with higher trade risks,and the United States-Canada-Mexico.This dissertation also finds that when foreign banks come from the United States-Canada-Mexico,it will be more beneficial for foreign banks to play a role in reducing external financing costs,information exchange costs and trade risk costs,so as to promote the positive impact of foreign banks on international trade.Finally,the study shows that the role of foreign banks in promoting international trade depends to a large extent on the level of financial development and institutional environment of the countries along the "Belt and Road Initiative" route.In addition,the heterogeneity of income level in the countries along the "Belt and Road Initiative" route also affects the financial intermediary efficiency and stability of foreign banks in the countries along the "Belt and Road Initiative" route.The research results of this dissertation provide a new idea for the debate on the advantages and disadvantages of financial globalization,that is,financial globalization realized through the local existence of foreign banks can have a positive impact on the real trade integration.