Spatial Econometric Analysis On The Competitive Differences Among Chinese Commercial Banks

Chinese commercial banks are significant parts of the financial market. A sound financial system plays a profound role in the stability of a national political and economic operation and development. Commercial banks, whose functions are mainly to absorb social savings, collect idle funds, help funds flow back into capital market through legitimate lending investments and profit from these, lead the daily operations of Chinese financial industry. Banks have efficient and effective information which is beneficial to carry out more complete financial services while new investment approaches can optimize capital allocations. Therefore, the deep research on the development competitiveness of Chinese commercial banks deserves practical value. Through the objective evaluation of the competitiveness of commercial banks, regulators and shareholders of banks can accurately understand the current situation and the future strategy of banks, and then can make decisions. Similarly, top managers, comparing their banks with others, can detect competitive disadvantages and external threats of their banks in time, and can make use of their competitive advantages and external opportunities. A reasonable evaluation of the competitiveness of banks is a vital basis for internal management to take effective measures. This is also the research significance of this paper.Due to the visible dual structure of domestic economy, there are apparent differences of both resources allocation mechanism and development priorities among provinces. However, the mobility of resources among regions is closely related to the spatial distribution. So the research on the competitive differences of commercial banks cannot objectively explain the differences among regional banks without concerning the spatial correlation. Therefore, this thesis tries to include geospatial dimensions in the evaluation system of the competitiveness of Chinese commercial banks, to build a spatial econometric analysis model of the competitiveness of Chinese commercial banks and conduct empirical analysis.This dissertation reveals specific performances and main factors of the core competitiveness of Chinese commercial banks, by describing their overall characteristics of current status and core competitiveness. Specific to the fact that domestic and foreign research on the differences of banking competitiveness tends to be based on time series, this paper will focus on the spatial differences of the competitiveness of Chinese commercial banks, without ignoring spatial effects and multiple dimensions. First of all, factor analysis will be applied to build a evaluation system of the competitiveness of Chinese commercial banks and then the competitiveness of four Chinese commercial banks will be evaluated and compared. Next, this thesis will conduct qualitative analysis on the main factors of spatial effects and regional features of Chinese commercial banks, illustrating the research significance of the inclusion of geospatial dimensions within the evaluation system of the competitiveness of Chinese commercial banks. Then, both spatial econometrics and spatial statistic models are introduced to carry out tests and empirical analysis on the spatial autocorrelation of banking competitiveness. Afterwards, conclusions will be provided. Spatial spillover effects exist among Chinese banking competitiveness and they show a positive correlation. The autocorrelation of the competitiveness of state-owned commercial banks is weaker than that of shareholding commercial banks. Through comparisons among three indicators, spatial spillover effects of the profitability of state-owned commercial banks are stronger then asset scale and risk management capability while spatial spillover effects of asset scale of shareholding commercial banks are stronger than the other indicators. Finally, recommendations specific to the development of Chinese commercial banks will be proposed, according to these conclusions.