Study On The Location Choice Of Foreign Direct Investment Of Chinese Commercial Banks

With the rapid development of the world economy,commercial banks continue to adjust their business type,organization and management to improve their competitiveness to provide better service.In the 21 st century,the development trend of commercial banks presents new features: globalization of branch networks,diversification of business operations and income channels,internationalization of business rules and electronization of financial services.By the end of 2015,22 Chinese banks have set up 1,298 branches in 59 countries or regions,including 213 primary branches.Chinese foreign direct investment in banking sector was $ 97.1 billion,which up 7.6 times from 2007.Therefore,the study of Chinese commercial banks of foreign investment location choice has important practical significance in this international and domestic background,.In this paper,we reviewed the existing theoretical paradigm,domestic and foreign literature,industry status and characteristics,which laid the theoretical basis and industry background in our study.Based on the characteristics of the Chinese foreign direct investment of commercial banks and the resource theory of foreign direct investment of emerging countries,we put forward influencing factors of the host country from the perspective of motivation of foreign direct investment of Chinese commercial banks.The per capita GDP,the total bilateral trade volume between the host country and China,the total amount of non-financial FDI,whether it has an international or regional financial center.In this paper,we also analyze the influence of institutional system and cultural distance of host country to the location choice of foreign direct investment of Chinese commercial banks.We establish the gravitational model and make empirical analysis based on the panel data of 18 host countries,from 2006 to 2015.The results showed that Chinese commercial banks are still in the initial foreign direct investment stage.In the process of the location choice of foreign direct investment of Chinese commercial banks,the market capacity of the host country,the bilateral trade volume and non-financial FDI and significant financial center have an obvious positive effect.For the institutional system,we analyze from the six dimensions: Voice and accountability,political stability and absence of violence/terrorism,government effectiveness,regulatory quality,rule of law and control of corruption.The study found that the political stability,regulatory quality and the rule of law are positively related to the FDI of Chinese commercial banks.Voice and accountability and the level of control of corruption are negatively related to the foreign direct investment of Chinese commercial banks.The effect of government effectiveness is not significant.Then we analyze the six dimensions of the institutional system using the principal component analysis and plus the control variables: the geographical distance between the host country and China,the exchange rate and the attractiveness to foreign direct investment to make a further analysis to verify the relationship between the market capacity of the host country,the bilateral trade volume and non-financial FDI,whether it has financial center,institutional system quality,cultural distance and the location choice of foreign direct investment of Chinese commercial banks.The results showed that compared with institutional system of the host country,the positive correlation between the Chinese commercial banks and the host market capacity,the customer follow and the financial center are more obvious.