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Impact of foreign bank presence on foreign direct investment in China


Ongena, Steven; Qi, Shusen; Qin, Fengming (2015). Impact of foreign bank presence on foreign direct investment in China. China & World Economy, 23(4):40-59.

Abstract

We analyze the impact of foreign bank presence on foreign direct investment in China. Our estimates demonstrate that foreign direct investment across regions in China is increasing in the existing network of regional branches of foreign banks, which itself is driven (and therefore instrumented) by the timing of the regional phasing out of the local limits for foreign banks on local currency business. This effect of foreign bank presence is particularly strong for foreign direct investment in those sectors in the region when banks are locally present that come from source countries where these specific sectors are importantly represented.

Abstract

We analyze the impact of foreign bank presence on foreign direct investment in China. Our estimates demonstrate that foreign direct investment across regions in China is increasing in the existing network of regional branches of foreign banks, which itself is driven (and therefore instrumented) by the timing of the regional phasing out of the local limits for foreign banks on local currency business. This effect of foreign bank presence is particularly strong for foreign direct investment in those sectors in the region when banks are locally present that come from source countries where these specific sectors are importantly represented.

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2 citations in Web of Science®
1 citation in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Date:2015
Deposited On:22 Dec 2015 16:30
Last Modified:08 Dec 2017 16:08
Publisher:Wiley-Blackwell Publishing, Inc.
ISSN:1671-2234
Publisher DOI:https://doi.org/10.1111/cwe.12120
Related URLs:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2399478 (Publisher)
Other Identification Number:merlin-id:12101

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