Research On The Influence Factors Of City Commercial Banks’ Cross-Regional Business

China’s city commercial banks have seen the removal of policy barriers to cross-regional operation since the appearance of the CBRC’s regulation that loosens the restriction on city commercial banks’ establishment of cross-regional branches. While city commercial banks have gained great momentum to expan d and develop in an accelerated pace in the process of cross-regional business, a series of side effects have emerged,the CBRC began to control the small banks’ cross-regional business strictly, this gave consider to the most appropriate conditions under which cross-regional business are necessary. Regulators, scholars as well as city commercial banks themselves start to explore the influencing factors of city commercial banks’ cross-regional business. But most of these studies focus on the banking system itself rather than the external environment, which makes it meaningful to conduct a comprehensive study on city commercial banks’ cross-regional business form the perspectives of banks as well as the external environment.This thesis analyzes the theoretical causes and the conduction of effects of city commercial banks’ cross-regional operations. Based on this, a research on the motivation mechanism of city commercial banks’ cross-regional business is made from two angels: firstly, emphasis is put on the influence of city commercial banks’ heterogeneity on their cross-regional operations and its mechanism; secondly, equal emphasis is put on the influence of external environment on their cross-regional business and its mechanism.In theoretical terms, this thesis uses the logit model to analyze the influenc e factors of city commercial banks’ cross-regional business from banks’ heterogeneity, local environment, and the environment of target areas. Conc lusions of the analyses are as follows: in terms of banks’ heterogeneity, asset sizes, capital levels, profitability, and the independence of boards of directors have a positive effect on the willingness of city commercial banks to operate cross-regionally; risk level and state ownership will have a negative effect on city commercial banks’ cross-regional operation; in terms of external environment and the environment of target areas, financial competitiveness and legal environment of target areas have a po sitive effect on banks’ willingness of cross-regional business, while local conditions have no such significant effects; both local and target areas’ levels of economic development have a positive effect on city commercial banks’ cross-regional business.Based on theoretical analyses and empirical evidences, policy suggestions are made from the aspects of both regulators and banks. Regulators should establish a sound dynamic adjustment mechanism and implement differentiated standards of market access. City commercial banks should build up a scientific plan for development, improve their overall strengths, and properly handle their relationships with local governments.