توسعه اقتصادی منطقه، سرمایه گذاران استراتژیک و بهره وری از بانک های تجاری شهرهای چینی

We investigate the effect of strategic investors on bank efficiency in the context of regional economic development. The data on Chinese city commercial banks operating regionally are well-suited for the study. Our findings suggest that strategic investors significantly increase efficiency in Chinese city commercial banks, while the effect of strategic investors on the efficiency of Chinese city commercial banks is negatively correlated to the level of regional economic development. The negative correlation of the effect of strategic investors on Chinese city commercial banks’ efficiency with regional economic development may be explained by the mix of local official promotion system and city commercial banks’ governance structure.

Attracting strategic investors has been one of three strategies to reform banking in China since its WTO entry in 2001.1 Existing literature (Megginson, 2005 and Berger et al., 2008) also shows that strategic investors have a significantly positive effect on bank efficiency in transition economies, including China. China, as the second largest economy, is not only vast in territory but it also has significant regional disparities in economic development (Qian and Litwack, 1998 and Sun and Yamori, 2009). Different development levels of a regional economy create different demands for types of financial arrangements (Levine, 1997) and influence divergent entrepreneurship (Wennekers et al., 2005), which may result in significant differences in technical and allocative efficiency in Chinese financial institutions. The Chinese case is well-suited to investigate the effect of strategic investors on bank efficiency in the context of regional economic development.

Attracting strategic investors is an important strategy for achieving more efficiency in Chinese city commercial banks. A vast majority of these banks operate regionally, and economic development shows significant regional disparities in China. We investigate the effect of strategic investors on Chinese city commercial banks’ efficiency in the context of regional economic development using well-suited data on Chinese city commercial banks. We first estimate the profit efficiency using hand-gathered data which cover 74 banks and 174 year-bank observations from 2002 to 2009. Second, we perform the regression of efficiency scores on the variables by including the strategic investors dummy and the level of regional economic development.