Can Chinese banks compete after accession to WTO?

Xu, Lei; Lin, Chien‐Ting

doi:10.1016/j.asieco.2007.09.001

Cited by 35 publications

(47 citation statements)

References 4 publications

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“…Whether domestic banks can survive competition from foreign banks has been heavily debated, especially after China's full accession to the WTO. For example, Xu and Lin (2007) argue that the performance of domestic banks would deteriorate in the post-WTO era, because foreign banks' competitiveness would exert huge pressure on domestic banks' profitability and solvency. Leung and Chan (2006) believe that only a very small number of foreign banks would be able to emerge as big players in China's banking industry due to the increasing competitiveness of domestic banks and high entry barriers and operating costs for foreign banks.…”

Section: Discussionmentioning

confidence: 99%

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Hsiao

Shen

Bian

2015

China Economic Review

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This paper estimates the cost and profit efficiency of the Chinese domestic banking sector to evaluate the effectiveness of China's financial reforms since 1978. We use the performance of foreign banks as the benchmark because foreign banks, subject to intensive worldwide competition, are perceived as possessing superior governing structure and organization, more advanced technologies and better trained labor force. On the other hand, competition in China's banking sector is mainly in the form of nonprice measures, thus putting foreign banks at a disadvantage. We find domestic banks have gradually caught up the cost advantage of foreign banks in a manner consistent with the increased competitive pressure. On the other hand, the profit advantage of domestic banks over foreign banks is widening because of institutional arrangements, cultural and social networks as well as the profit scope and revenue scale economy.

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Section: Discussionmentioning

confidence: 99%

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Hsiao

Shen

Bian

2015

China Economic Review

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“…Such deficiencies in ‘hard’ information typically lead to a bias against SME borrowers (Berger and Udell, , ; Bertomeu and Marinovic, ). In addition, China's inefficient banking sector (Xu and Lin, ; Ho and Iyke, ) and SMEs being innovative and privately owned (Allen et al ., ; Sohn and Kim, ) may further exacerbate the information asymmetry and disadvantage SMEs in accessing bank loans.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…The features of SMEs may contribute to various levels of information asymmetry and their difficulty in accessing bank loans. Existing literature suggests that unequal development of the banking sector in the macro environment (Xu and Lin, ; Ho and Iyke, ), sector‐related features such as that of high‐tech (Brinckmann et al ., ; Sohn and Kim, ), and firm‐level fundamentals such as that of smaller size (Stiglitz and Weiss, ; Bertomeu and Marinovic, ) and that of private ownership (Allen et al ., ; He et al ., ) may exacerbate the information asymmetry and further disadvantage SMEs when accessing bank loans. Therefore, it is worthwhile to examine the impacts of VC backup towards various SMEs under financial constraint.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Venture capital certification of small and medium‐sized enterprises towards banks: evidence from China

2019

Accounting & Finance

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Through a proprietary dataset of small and medium-sized enterprises (SMEs) on China's National Equities Exchange and Quotations (NEEQ), we examine the impact of venture capital (VC) backup on access to bank loans by SMEs. We find that VC backup can help SMEs obtain more bank loans under better conditions and significantly relieve their financing constraint. This is especially meaningful for private SMEs, those in hightech, in regions of less-developed banking industry, or with lower quality accounting information. This study may have policy implications as a pilot 'combined debt-equity financing' discussion in the context of the largest bank-based economy.

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“…Ferri, 2009;García-Herrero et al, 2009;Matthews and Zhang, 2010). By following the USA example of Resolution Trust Corporation during the savings and loans crisis in the 1980s, China established four AMCs to deal with the NPLs of the banks (Bonin and Huang, 2001;Xu and Lin, 2007). By offloading trillions of RMB NPLs into the four AMCs, Chinese banks could improve their NPL status temporarily but may still need future bailouts (Dobson and Kashyap, 2006;Ma, 2006).…”

Section: Literature and Hypothesismentioning

confidence: 99%

Bad debt provisions of financial institutions

Shan

2012

International Journal of Managerial Finance

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Access to this document was granted through an Emerald subscription provided by 353605 [] For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to investigate whether the level of bad debt provisions of financial institutions is affected by internal governance mechanisms (IGMs) from the perspective of the Type II principal-principal (PP) conflicts between the controlling shareholders and the minority shareholders. Design/methodology/approach -The authors' sample covers all listed financial institutions in China, comprising a panel data set of 139 firm-year observations covering 1999 to 2009. Within China's two-tier corporate governance context, the three IGMs -ownership structure, board of directors and supervisory board -are measured to examine the level of bad debt provisions. Findings -The findings suggest that state ownership and legal person ownership are negatively related to the level of bad debt provisions, but board size reveals a positive association. Other factors including foreign ownership, independent directors, board meeting, supervisory board size and supervisory board meeting were found to have no impact. Practical implications -The spirit of corporate governance reform has not been transferred to financial institutions sufficiently. The board of directors and supervisory board actually act the roles of "window dressing" or "rubber stamp" within the current two-tier system. From the Type II PP perspective, the controlling shareholders are found to moderate the conflicts between other parties but they still expropriate the interests of minority shareholders and are the real beneficiaries of recent reforms. Thus, further financial reforms seem necessary in China. Originality/value -The paper provides an empirical analysis of factors that underlie IGMs during an important period of regulatory change and organizational reform, and fills a literature gap concerning the effectiveness and efficiency of financial institutions.

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Can Chinese banks compete after accession to WTO?

Cited by 35 publications

References 4 publications

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Venture capital certification of small and medium‐sized enterprises towards banks: evidence from China

Bad debt provisions of financial institutions

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