The Impacts Of Foreign Banks Entry On The Efficiency Of Domestic Commercial Banks In China

The foreign bank enters China having already walked 20 courses many years, with development of whose part, and the banking being affecting in the homeland more and more deep having occupied Chinese financial market gradually in the aspect advantage such as scale, system, product, financial affairs strength and international network.Foreign bank's entry advantageous also has the shortcoming to the host country. On our country's actual situation, on the one hand, the Foreign bank enters is advantageous to the promotion internal commerce bank system reform, raises our country Commercial bank's managerial and administrative expertise, speeds up our country's financial innovation, is advantageous in our country Commercial bank's internationalization development. On the other hand, compares with the Chinese-funded bank, foreign bank's strength is more abundant, in aspects and so on management and operation, property quality, human resources and product innovation ability holds the overwhelming superiority. The Foreign bank enters causes Our country Internal commerce Bank faced with a more stern challenge and the huge pressure, simultaneously, domestic bank's robustness obtains the challenge.Firstly, this paper introduces the research at home and abroad. Secondly, the paper anlyzes the process and the status quo of the entry of foreign bank. Then, from a theoretical point of view, the paper explain the positive impact and the passive impact on efficiency of domestic commercial banks after the entry of foreign banks into China. At last, from the empirical point of view, the paper makes some analysis of the effects on efficiency. In the research, the paper use DEA approach to measure the numerical value of the efficiency of the state-owned commercial banks and the ten major joint-stock commercial banks during the year 1995 to the year 2006. The result shows that the efficiency of joint-stock commercial banks is generally higher than state-owned commercial banks, and the value of the efficiency of joint-stock banks are relatively stable. The efficiency of state-owned banks have volatile value. Then, on the basis of the value of the efficiency and some indicators of commercial banks, I got a composed of cross-section data. I use the data pool to do a linear regression analysis of the impact on efficiency of domestic commercial banks. The paper comes to the conclusion that it is positive impact that foreign banks entery on technical efficiency of domestic commercial banks, but its influence is still very limited; Secondly, domestic joint-stock commercial banks are mainly affected by the foreign banks, but the impact on state-owned commercial banks is not significant. Finally, the paper makes a summary and gives some measures.