The Effects Of Foreign Banks' Entry On Chinese Banks' Efficiency

The purpose of this paper is to how the foreign banks'entry affect the efficiency of commercial banks in China. The first part introduces different entry methods. The second part analyzes the effect on efficiency and gives some phenomenon and data to support the analyze. The third part use Panel Data empirical method to test the relation that the second part concluded. The results do support the conclusion in the second part. At last, this paper offers some reasonable suggestions for government.The innovative results of this paper consists of two parts. The first, the paper makes a comparison of different definition of bank efficiency, and points out the goods and drawbacks. Based on this, the paper give a new definition which both has academic foundation and practical value. The most important innovative results is giving the ways in which different foreign banks'entry affect the efficiency of local banks. Now, almost literature neither divide the different entries nor provide the logical way because most of them did not make the clear definition.In summary, the paper makes up the drawbacks, provides the government how foreign banks affect local banks, and gives useful suggestions for local banks.