A Comparative Study On The Loan Behavior Of The Asian Infrastructure Investment Bank And The Asian Development Bank

The traditional multilateral development banks have failed to meet the infrastructure financing needs of recipient countries,and China has led the establishment of the Asian Infrastructure Investment Bank(AIIB)in response to the calls of developing countries and to improve its international standing.The AIIB has made innovations in terms of its purpose and business,making many of the problems inherent in the Asian Development Bank(ADB),another major multilateral development bank in Asia,even more prominent.Moreover,due to the possibility of duplication of business between the two,the ADB has great competitive concerns about the AIIB.This has led to discussions on issues such as "what are the differences and similarities between the two banks in terms of actual lending operations," "what are the differences and similarities in loan decision-making considerations," and " whether there will be fierce competition.".This thesis uses comparative analyses and empirical analyses to study the lending behavior of the two multilateral development banks and to identify the advantages and differences between AIIB and ADB in terms of their purpose and lending operations,and to deepen people’s understanding of AIIB’s business positioning and purpose and functions,which is of great significance for expanding AIIB’s influence and enhancing China’s international discourse.First,by comparing the loan characteristics of the two banks,it is found that the two banks have different priorities in terms of purpose and business.The loan business of the AIIB is targeted at the infrastructure sector and can complement the shortcomings of the ADB,and its business purpose can better match the "the Belt and Road" development initiative;Due to the differences in loan types,the two major multilateral development banks will not engage in fierce competition,but can achieve good cooperation,especially in South Asia,where there is good room for cooperation;The study also found that the AIIB has problems such as relatively concentrated loans and may face potential sovereign credit risks.Secondly,in the empirical part,when using the principal component analysis method to construct infrastructure indicators,it was found that the development of infrastructure in various borrowing countries of the AIIB was extremely uneven.When using the Heckman two-stage model to conduct an empirical analysis of the factors affecting the loans of the AIIB,it was found that the loan decisions of the AIIB were affected by the infrastructure,economic,social,and environmental factors of the borrowing countries.From the analysis of loan characteristics and loan impact factors,it is proved that the AIIB has well implemented its business purpose,namely,focusing on and investing in the infrastructure field.Using a twoway fixed effect model to analyze the influencing factors of ADB loans and compare the two,it is concluded that the two major multilateral development banks both attach importance to the infrastructure level of the borrowing country when conducting business,while paying greater attention to countries in economic distress.However,in terms of differences,as AIIB is dominated by developing countries and focuses on infrastructure construction,it will give more consideration to the urbanization level and actual economic development level of the borrowing country in its loan decision-making,which reflects the difference between AIIB and ADB in terms of purpose and business positioning.Finally,this thesis summarizes the content of the previous section,and puts forward corresponding policy recommendations to address the problems found in the study,such as relatively concentrated loans and high sovereign risk,in the AIIB.Firstly,strengthen sovereign risk management;Secondly,optimize the voting rights mechanism;Thirdly,continue to build a cooperation platform.