An Analysis Of The Effect Of The Introduction Of Foreign Strategic Investment On The Performance Of Listed Commercial Banks In China

With China’s financial industry open to the outside world as well as the support of China’s government, most of the listed commercial banks in China have introduced foreign strategic investors, and they have cooperation with each other at some aspects. According to the experience of countries in Central and Eastern Europe, the introduction of foreign strategic investment will significantly improve the level of performance of the banking sector in the country. Therefore, this paper aims to study the introduction of foreign strategic investors or not, as well as its stake with the listing of the relationship between the performance of the commercial banks in China, and analysis of the role of foreign strategic investors to improve the performance of China’s listed banks.At first, this paper describes the history of introducing foreign strategic investors in China’s banking industry and their cooperation in the status quo. Then the article analyzes the ways that foreign strategic investors to affect the performance of listed commercial banks in China from three aspects:attract investment, cited system and introduce ideas. This article focuses on property rights theory, the principal-agent theory, transaction cost theory and the theory of strategic alliances. And according to the "CAMEL" evaluation system, the paper select some specific financial indicators to evaluate the performance of banks in order to analyze the impact of the introduction of foreign strategic investment for the performance of China’s listed commercial banks. This article also selects10listed commercial banks as a sample, and makes an empirical analysis using a panel data model. The empirical results show that the introduction of foreign strategic investors has positive effects on the bank’s capital adequacy ratio, return on net assets and net fee and commission income accounted for operating income, and it has a negative effect on the rate of non-performing loans, the cost to income ratio and liquidity ratio. The results are consistent with expectations. However, the introduction of foreign strategic investors only has a significant impact on the non-performing loan ratio of banks, the cost to income ratio, as well as fee and commission income accounted for operating income. As for the other three indicators, the impact is not significant. At last, according to the empirical results, this paper provides some proposed policies.