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bjective of this research is to discuss the relationship between foreign bank entry and China banking market. The author has adopted the methods of the economic data; empirical analysis of the impact of FDI on the China’s banking market concentration. Besides, qualitative analysis and quantitative analysis are also adopted in this study. Qualitative analysis of FDI through the annual scale of a large number of market concentrations and other statistical data is helpful to draw a more precise conclusion. Then it has discussed the result from five aspects, which are net interest margins, noninterest income, cost, city-bank sample and robustness and specification test. The improved presence of foreign bank’s function is used to assets the influence of those banks on local banking market performance in China.

With the development of economic globalization, foreign direct investment has played an important role in China’s economic development. As the core of economic development, the foreign direct investment also appears in banking industry. Although there are various kinds ways for FDI to get into China, such as building the branches of foreign bank, buying the equity of local bank and so on. While compared to the previous researches, the action of allowing FDI is the sign to eliminate the obstacles in banking competition, which is helpful to promote reform and progress in banking industry.

A spatially disaggregated measure is constructed in this study, which is FEI (foreign exposure index), to overcome problems related to traditional aggregated measures the correlations between foreign presence and local banking sector. Through using the empirical panel data, it analyses the foreign entry in China. Then the FEI was found tow advantages. The first one is that it offers a more precise measure of the foreign presence influence on individual banks. So it facilitates a more precise assessment of the relationship between foreign direct investment and China’s banking performance. The second advantage is that FEI introduces variables of year dummies into the model of econometric analysis. The effect of foreign bank , entry can be isolated from other macroeconomic influences.

The main results of the analysis are consistent and significant with the previous theoretical predictions. In opposite to the confusing findings of previous studies happened to aggregate measures, strong evidence is offered by FEI that in China, the entry of foreign banks is supportive of a more efficient and competitive local banking industry. This finding is important implications to policy. During the period of reform, there exist two opposing opinions confused the policy decisions making related to the foreign entry liberalization in China. It was argued by the positive stream that the entry of foreign bank can enhance the domestic baking’s efficiency. While the pessimistic opinion posits that under intensified foreign competition, local banking industry will suffer a setback and may face the dangerous to be taken over by foreign banks. In this study, the positive outlook is supported by the findings, which provides empirical evidence to prove it. Therefore, it is correct policy of opening up to make banking sector facing foreign competition.

Of course, the period of observation is not full scale, in which the foreign entry was limited. S本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。