Regional Economic Development, Strategic Investors, and Efficiency in Chinese City Commercial Banks
32 Pages Posted: 6 Feb 2012
Date Written: January 26, 2012
We investigate the impact 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. Findings suggest that strategic investors significantly increase efficiency in Chinese city commercial banks; the impact 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 impact of strategic investors on Chinese city commercial banks’ efficiency with regional economic development may be explained by the mix of the local official promotion system and the city commercial banks’ governance structure.
Keywords: regional economic development, strategic investor, efficiency, city commercial banks, China
JEL Classification: G21, G32, O16
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