Effect Of Foreign Bank Entry On Credit Accession In China

With the development of the world financial industry globalizationand the deepening of the reform and opening up of China’s financialindustry, the influence of foreign Banks enter to China economic andfinancial aspects is more and more obvious.Especially after theopening of RMB business in China in2001, foreign banks began todevelop rapidly in China. The impact on the supply of credit began toslowly appear. Foreign banks will not only directly affect China’senterprises to get credit, but also through the indirect impact ofChina’s banking business to credit availability.Research into theimpact on China’s foreign bank business credit availability has acertain theoretical and practical significance.In the aspect of theory,it can provide some of the theoretical basis research, analyticalmethods and reference data selection and processing for future.In theaspect of reality, it can help country to better address the problem offinancing enterprises, especially the current financing difficulties ofSMEs. To study the impact of foreign banks entry on the corporate creditavailability， this paper use the enterprise-level data changes ofChina’s financial opening policies. Writing methods of this paper usedthe theoretical and empirical analysis. The part of theoreticalanalysis is mainly analyze the impact of foreign banks entry on thedirect and indirect on our business credit availability.The argumentvariable of this part selected variable of foreign banks entry andcompanies’ heterogeneity in the part of empirical analysis.And thedependent variable of this part selected corporate long-term bankloans. This paper substitute the probability and the number ofenterprises’ credit availability with stocks and flows of thelong-term bank loans which enterprises have.Finally this paper comeinto effect on the business of foreign banks entry to the number andprobability of long-term bank loans.Therefore, the study of the impact of foreign banks entry onChina’s corporate credit availability has important theoretical andpractical significance.This article uses the methods of thetheoretical analysis and empirical analysis. This paper is use thechange of the opening-up policy of domestic financial to study theimpact of foreign banks entering on the corporate credit availability.In this paper, the study show that: after foreign banks entering, theenterprise of good profit use more long-term bank loans; However, those high potential collateral value of the enterprises, state-ownedenterprises and big enterprises did not use more loans, whichindicate that foreign banks enter to China produced a distributionfunction for enterprise credit, and the distribution effect isgood.Therefore, to reduce restrictions on foreign banks, opening upthe financial sector to better solve the difficult problem of corporatefinance.