An Empirical Research On The Influence Of Trans-regional Operation On The Performance And Risk Level Of City Commercial Banks

City commercial banks have grown into the third echelon of China's banking system after more than 20 years' development since they are reorganized from the urban credit cooperative in 1995.Especially in 2004,after the financial regulatory authorities gradually liberalizes the restrictions on the trans-regional operation of the city commercial banks from the policy level,the operating in different places of the banks enters the rapid stage,thereby realizing the expansion of their own market share and the improvement of business performance and becoming an active force to increase regional financial markets.But at the same time,the problems caused by the disorderly competition after the po licy liberalization begin to appear,and some city commercial banks ignore their own management problems in the radical trans-regional expansion,and finally damage their own interests.Therefore,it is a great theoretical and practical significance to study whether the trans-regional operation of the city commercial banks affects their business performance and the level of risk.Based on the unbalanced panel data collected from 79 city commercial banks from 2008 to 2016,this paper mainly studies whether city commercial banks will have an impact on the performance and risk level when they conduct trans-regional operation.It is shown that there are two major problems in the current domestic research on city commercial banks' trans-regional management,that is,the lack of objectivity and representativeness of the indicator to measure the degree of trans-regional operation,and the neglect of the estimation errors caused by endogenous problem.Therefore,on the basis of summing up the trans-regional operation of relevant commercial banks at home and abroad,this paper puts forward the hypothesis test,and constructs the agency variable which can reflect the degree of trans-regional operation in all aspects--the institutional dispersion index adjusted by distance,to measure the degree of trans-regional operation of the sample banks in the sample time,and establishes a multivariate statistical regression model which can test the hypothesis of the research.In addition,in order to solve the endogenous problems of trans-regional operation,this paper introduces exogenous policy impact as the instrumental variable.It is found that,in accordance with the research results at home and abroad,trans-regional operation can improve banks' own operating performance to some extent through economies of scale,in addition,trans-regional operation can also effectively spread investment risk,avoiding the risk of regional economic fluctuation is conducive to reducing the risk level of urban commercial banks.In the part of policy recommendations,the corresponding policies and measures are put forward for the regulatory authorities and city commercial banks to pay attention to the problems that should be paid attention t o at the regulatory level and the implementation level of the commercial banks,giving suggestions for the better implementation of trans-regional operation and the development of domestic banking industry.