Research On The Influence Of Banking Industry Opening Up On The Efficiency Of Commercial Banks

China has announced a new round of financial sector opening in 2018,and in the following three years,the government has intensively introduced more than 50 opening policies to expand openness by encouraging international financial institutions in China.The banking industry,as the front line of financial sector opening,has not only relaxed the market entry threshold of foreign banks,but also abolished the rigid restrictions on the shareholding ratio of foreign investors in Chinese commercial banks.Foreign institutions have accelerated their entry into Chinese banking market,which has promoted the upgrade of commercial banks’ operation tactics and governance strategies,helped local commercial banks to make up for their shortcomings,while also brought about fierce competition in the meantime.Therefore,it is a matter of concern that how the efficiency of commercial banks will change in this context.This thesis took the efficiency of commercial banks as the research object,and selected the ratio of total assets of foreign banks in Chinese banking market and the ratio of foreign shareholding in Chinese commercial banks as the proxy indicators of banking industry opening from the aspect of market access,which has been the most vigorous implementation of banking openness policies in recent years,and analyzed how the opening of banking industry has affected the efficiency of commercial banks from two directions:external market environment and internal governance structure.In addition,the thesis gave relevant countermeasure suggestions for the expansion of China’s banking industry opening up and how commercial banks can improve their efficiency in this context.First,the thesis used stochastic frontier analysis(SFA)to measure the cost efficiency and profit efficiency of 103 commercial banks in China from 2010 to 2020,and then established a panel data model to examine the impact of banking industry opening up on the efficiency of commercial banks.Based on the previous theoretical analysis and empirical testing,the main conclusions of this thesis include:(1)In general,banking industry opening up has a negative impact on cost efficiency and profit efficiency of commercial banks,and there are differences between the impact of the banking openness on the efficiency of listed and unlisted banks.The entry of foreign banks has a more significant impact on the efficiency of unlisted banks and the foreign ownership has a more significant impact on the cost efficiency of listed banks;(2)There is a positive "U" shaped relationship between banking openness and commercial banks’efficiency,as the banking industry opening deepens,the cost efficiency and profit efficiency of commercial banks will show a trend of decreasing first and then increasing;(3)Market concentration plays an intermediary role in the impact of banking industry opening on the efficiency of commercial banks.Banking industry opening increases the market concentration of commercial banks’ loans and deprives the incentive of commercial banks to improve management,leading to efficiency loss.