Research On The Effects Of Foreign Banks Entry On The Efficiency Of Domestic Banking In China

Entering the 1970 s,the world's financial business began to expand and influence each other.The internationalization of China's financial industry mainly followed the trend of the era of reform and opening up.After the reform,with the economic globalization background,the division of labor became increasingly frequent and clearly,foreign banks took the opportunity to enter China.Bank of East Asia first opened its Shanghai financial business once again,which opened a new era of foreign banks entering into China.With the deepening of domestic financial reform and after years of development,foreign banks have been from the initial development of the stars to the current an important member in Chinese financial market.At the end of 2006,China kept her promise:abolished numerous business restrictions on foreign banks,gave its national status fully and encouraged its participation in China's financial markets.However,is the large-scale entry of foreign banks profitable or harmful to China's banking industry? How do it influence operating efficiency of China's various banks?The study of this issue can offer advice and provide basis for the development of China's banking industry,with theoretical and practical significance.After collecting the research of scholars in the past,this paper,through theoretical and empirical methods,mainly studies from the comprehensive opening stage of the banking industry after 2007.On the basis of measuring the dynamic efficiency of China's banks,it is confirmed that the efficiency of China's banks is affected by foreign banks,puting forward the relevant countermeasures finally.The paper first analyzes the positive and negative effects brought by foreign banks in theory and then describes the current situation of foreign banks in China,including the way of entering,the development process and the development trend.In the fourth chapter,the DEA-Malmquist model is used to measure the dynamic efficiency of 16 major commercial banks in China from 2007 to 2015,and the dynamic efficiency decomposition analysis of state-owned and joint-stock banks is carried out respectively.In the fifth chapter,by selecting the second-order term of the foreign bank as the main explanatory variable,the dynamic efficiency of the fourth chapter is used as the explanatory variable,and then the panel model regression is established by Stata12 software.Chapter 6 makes its own recommendations based on the conclusions.In this paper,we find that:(1)After fully opened of the industry,the total factorproductivity(dynamic efficiency)of China's commercial banks is steadily increasing at an average rate of 5.1% per year.At the same time,the improvement is mainly based on the improvement of the technical level of the whole industry.(2)The reform of state-owned commercial banks has achieved corresponding results.In the past,backwardness,such as risk management,internal control and business innovation,have made great improvements.Non-interest income is particularly larger than leading joint-stock banks.after opening in 2007,The average efficiency increase of state-owned bank was faster than that of joint-stock banks.(3)The effect of foreign banks on the efficiency of China's banks is significant.There are positive U-shaped effect,and the threshold is 1.37%.The current foreign bank entry degree is 1.028%,not exceeding the threshold,still standing in the U-type left stage,it should continue to increase the intensity of openness.Opening to the threshold,the spillover effect of the effect will be fully play,as well as in the brutal competition environment the local banks continue to learn to improve,then the positive effect began to dominate,the dividend of opening policy will soon arrive.