An Empirical Study On The Impact Of Internationalization Of China’s Commercial Banks On Performance

With the rapid development of China’s financial economy,Chinese commercial banks have sought new profit growth points through dual-way international development,and the diversity of business has been expanded in the process.However,compared with large international banks,Chinese banks still have various shortcomings in international operations,such as low profitability and lack of talents.The impact of international business operations of Chinese commercial banks on performance is good or bad.How does business performance affect international development? This article starts from this perspective and discusses it.Taking the panel data of 18 listed commercial banks in China from 2008 to 2017,this paper constructed a dual-way internationalization index(DII)to reflect the degree of internationalization of these banks and calculated Malmquist TFP index to measure the banks’ performance.The panel models are used to test the relation between the two indicators and the result shows that,there is a positive effect between internationalization and performance,but the degree of explanation was rather low.It is when the sample is reduced to 16 banks with higher DII that the positive correlation becomes obvious.Within this higher DII group,internationalization has strongly promoted bank performance,and in turn,bank performance has a stronger positive correlation on the development of internationalization.It implies that bank with higher performance is more likely to engage in internationalization,while the vise may not hold for all.Improving performance through internationalization is not the main goal,and may have threshold effects.Commercial banks shall attach importance to enhance their competitiveness by improving the level and quality of inward internationalization,and consider outward internationalization strategies according to their capacities.