The Impact Of Foreign Bank Entry On The Domestic Value-added Rate Of Enterprise Exports

In the context of global value chain division of labor,products are no longer produced by only one country,but have evolved into a value chain system where multiple countries undertake different links.Each country embeds itself into the global value chain based on its own resource endowment,and then obtains corresponding value-added benefits based on its position in the value chain.The food processing industry is an important industry that extends traditional agriculture downstream.It is not only closely related to the production of primary agricultural products,but also an important focus on promoting the high-quality development of the agricultural industry.The increase in export domestic added value of this industry not only helps to stabilize and promote the growth of farmers’ income,but also reflects the overall economic benefits and competitiveness of domestic agriculture in participating in the global value chain.However,due to insufficient support from financial services,the improvement of the efficiency of China’s food processing enterprises has been constrained.A large number of exports are concentrated in low value-added products,and the actual trade benefits obtained are far lower than those of developed countries.On the other hand,relaxing foreign investment access restrictions in China’s banking industry is an important part of its financial system reform,which can effectively stimulate local financial vitality and assist enterprises in their export activities.Based on this,this article takes the entry of foreign banks into China as the starting point to explore the impact and mechanism of foreign bank entry on the domestic value-added ratio(DVAR)of food processing enterprises’ exports.Not only does it help to objectively estimate the micro effects of foreign bank entry in the past,but it can also deepen the opening up to the outside world to achieve an increase in the trade benefits of Chinese agriculture in participating in the global value chain,and provide important policy guidance to promote China’s transformation from a major agricultural trading country to a strong agricultural trading country.This article focuses on the period when foreign banks entered China with the greatest changes,and combines the corresponding year’s micro enterprise database and manually collected data such as financial license information of foreign banks at the prefecture level provided by the China Banking and Insurance Regulatory Commission.Using a two-way fixed effect model and mechanism validation two-step method,this article quantitatively studies the impact and mechanism of foreign bank entry on the export value-added of food processing enterprises.In addition,this article also considers the impact of different enterprise ownership,trade methods,and financing constraints,and uses group regression to analyze the heterogeneity in the impact of foreign banks’ entry on the domestic value-added rate of food processing enterprises’ exports.The research results indicate that: firstly,the entry of foreign banks will increase the domestic value-added rate of food processing enterprises’ exports.After using the Heckman two-stage model and instrumental variable method to control endogeneity issues,this conclusion remains robust.Secondly,after foreign banks enter China,they mainly use two mechanisms to alleviate the financing constraints of food processing enterprises and reduce the relative prices of domestic intermediate goods to promote the increase in the export domestic value-added rate of food processing enterprises.Thirdly,the heterogeneity analysis at the enterprise level indicates that foreign banks have a strong promoting effect on the export DVAR of food processing enterprises with foreign participation in ownership,dominated by general trade methods,and low financing constraints.The main contribution of this article lies in: firstly,the refinement of the research object,focusing on the food processing industry,which differs significantly from other manufacturing industries in terms of production scale,input of main intermediate goods,and demand elasticity of products.From the perspective of trade returns,this article explores the impact of foreign bank entry on it.Secondly,the deepening of the research perspective comprehensively considers the impact path of foreign bank entry on the export DVAR of enterprises,explores the micro mechanism of the impact of foreign bank entry on the export DVAR of food processing enterprises,and supplements relevant literature to a certain extent from the theoretical framework and transmission mechanism.The empirical results of this article can provide reference and guiding scientific basis for objectively estimating the micro effects of foreign bank entry in the past,as well as deepening the opening up to the outside world to achieve the growth of China’s food processing industry’s actual trade gains in the global value chain.