Research On Chinese Commercial Banks’Overseas Investment Efficiency And Impact Factors

Under the background of global economic integration and deepening of reform and opening up, China has actively promoted national development strategy of "going out" and non-financial enterprises has also actively carried out foreign investment. With national policy’s guidance and offshore financial services demand of non-financial enterprises, China’s commercial banks are actively developing overseas investment. In2006, China fully opened its banking sector, foreign banks began to enter China’s banking market by setting up branches or equity participation. Meanwhile, China Banking Regulatory Commission clearly stated,"encourages Chinese commercial banks to go overseas", which provides policy support for banks to expand overseas business. When China’s main banks complete their IPO, they began to keep pace with international banks overseas investment, carry out globalization strategy and invest overseas large-scale to improve international level. However, for China’s commercial banks, it is an important issue how to improve the operating efficiency of its overseas investment in its way to international development. Improve and enhance the efficiency of the bank is to improve competitive power, the efficiency issue involves not only the merits of the banks, but the survival and development of the commercial banks. Research on efficiency of overseas investment can serve better Chinese banks to enter international market, as well as enhance the overall competitiveness of banking industry.Based on actively reading literature and collecting large amounts of data, the author of this paper has reviewed the theories of commercial banks’overseas investment and influencing factors, and analyzed the status of Chinese commercial banks overseas investment from four perspectives:the gross investment, investment patterns, investment layout and investors and summed characteristics and trends of Chinese commercial banks overseas investment. Then the author used the DEA model to measure the efficiency of11overseas subsidiary banks located in7typical overseas invest countries and further summarized the overall characteristics by overall, individual and regional. Then the author collected2005-2007panel data of7overseas investment region and11overseas subsidiary banks and used Eviews software to analyze influencing factors on efficiency of overseas subsidiary banks using static and dynamic models. Though the empirical analysis, the author draw a conclusion that profitability and asset allocation of overseas investment institutions, financial development of host country, trade volume between China and host country are four factors influencing efficiency of commercial banks’ overseas investment. Finally, based on empirical result the author put forward certain suggestion to overseas investment of Chinese commercial bank and analyzed the potential of overseas investment destination.