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The Locational Distribution of Foreign Banks in China: A Disaggregated Analysis

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  • Canfei He
  • Godfrey Yeung

Abstract

He C. and Yeung G. The locational distribution of foreign banks in China: a disaggregated analysis, Regional Studies. This paper examines the location choices made by foreign banks of different organizational form and size in China. Results from the conditional logit models suggest smaller foreign banks tend to pursue the 'follow-the-customer' strategy, while larger banks are likely to use the 'follow-the-competitor' strategy in China. The agglomeration effect is more important than the first-mover cities as a determinant of the location choices make by foreign banks in China. This finding could be partially explained by the location-bounded institutional variables that are unable to be fully reconciled with the recent deregulation policies. [image omitted] He C. et Yeung G. La distribution geographique des banques etrangeres en Chine: une analyse desagregee, Regional Studies. La presente etude cherche a analyser le choix d'emplacement des banques etrangeres en Chine en fonction de leur structure organisationnelle et de leur taille differentes. Les resultats provenant des modeles logit conditionnels laissent supposer qu'en Chine les plus petites banques etrangeres ont tendance a poursuivre la strategie de 'suivre le client', alors que les plus grandes banques sont plus susceptibles d'adopter la strategie de 'suivre le concurrent'. L'effet d'agglomeration s'avere plus important que ne l'est le phenomene du premier arrive dans les grandes villes comme determinant des choix d'emplacement des banques etrangeres en Chine. Ce resultat pourrait, du moins en partie, s'expliquer par des variables institutionnelles qui sont delimitees geographiquement et qui ne peuvent pas etre conciliees avec les politiques recentes de dereglementation. Banques etrangeres Choix d'emplacement Modele logit conditionnel Chine He C. und Yeung G. Verteilung der Standorte auslandischer Banken in China: eine disaggregierte Analyse, Regional Studies. In diesem Beitrag werden die Standortentscheidungen auslandischer Banken verschiedener Organisationsformen und Grossen in China untersucht. Aus den Ergebnissen konditionaler Logit-Modelle geht hervor, dass kleinere auslandische Banken in China meist eine Strategie des „Dem-Kunden-Folgens“ wahlen, wahrend grossere Banken meist auf eine Strategie des „Der-Konkurrenz-Folgens“ setzen. Der Agglomerationseffekt spielt als Determinant fur die Standortentscheidungen auslandischer Banken in China eine grossere Rolle als die Pionierstadte. Dieses Ergebnis lasst sich teilweise durch die standortgebundenen institutionellen Variablen erklaren, die sich nicht vollstandig mit den aktuellen Deregulationspolitiken in Einklang bringen lassen. Auslandische Banken Standortentscheidungen Konditionales Logit-Modell China He C. y Yeung G. La distribucion de ubicacion de los bancos extranjeros en China: un analisis desglosado, Regional Studies. En este articulo analizamos las decisiones de ubicacion tomadas por bancos extranjeros de diferentes formas de organizacion y tamanos en China. Los resultados de los modelos logit condicionales indican que en China los bancos extranjeros mas pequenos tienden a optar por la estrategia de 'seguir al cliente' mientras que los bancos mas grandes tienden a usar la estrategia de 'seguir a la competencia'. El efecto de aglomeracion desempena un papel mas importante que el de las ciudades pioneras para determinar las decisiones de ubicacion que realizan los bancos extranjeros en China. Estos resultados podrian explicarse en parte por las variables institucionales vinculadas a la ubicacion que no pueden reconciliarse totalmente con las recientes politicas de desregulacion. Bancos extranjeros Decisiones de ubicacion Modelo logit condicional China

Suggested Citation

  • Canfei He & Godfrey Yeung, 2011. "The Locational Distribution of Foreign Banks in China: A Disaggregated Analysis," Regional Studies, Taylor & Francis Journals, vol. 45(6), pages 733-754.
  • Handle: RePEc:taf:regstd:v:45:y:2011:i:6:p:733-754
    DOI: 10.1080/00343401003614282
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    References listed on IDEAS

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    1. John H. Dunning & Sarianna M. Lundan, 2008. "Multinational Enterprises and the Global Economy, Second Edition," Books, Edward Elgar Publishing, number 3215.
    2. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
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    3. Tata, Fidelio, 2018. "Client-proximity-based spatial clustering of European corporate and investment banking after a hard Brexit," Finance Research Letters, Elsevier, vol. 27(C), pages 241-246.
    4. Xiaohui Yuan & Jiayan Yan, 2022. "Reverse Efficiency Spillovers from Host Country Banks to Foreign Banks: Evidence from Emerging Market Bank Subsidiaries in Developed Markets," Management International Review, Springer, vol. 62(6), pages 915-946, December.
    5. Laura Barbieri & Mariarosa Borroni & Andrea Lippi & Mariacristina Piva & Simone Rossi, 2021. "Determinants of Bank Branch Presence in Local Areas: A Comparison Between North and South of Italy," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(9), pages 1-15, August.
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    7. Shi, Yining, 2022. "Financial liberalization and house prices: Evidence from China," Journal of Banking & Finance, Elsevier, vol. 145(C).
    8. Röell, Christiaan & Osabutey, Ellis & Rodgers, Peter & Arndt, Felix & Khan, Zaheer & Tarba, Shlomo, 2022. "Managing socio-political risk at the subnational level: Lessons from MNE subsidiaries in Indonesia," Journal of World Business, Elsevier, vol. 57(3).

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