The Impact of Foreign Banks' Entry on Profitability of Chinese Commercial Banks
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DOI: 10.23977/etss.2018.12531
Author(s)
Lingyue Gao, Yanzhi Lu, Qinglin Du
Corresponding Author
Lingyue Gao
ABSTRACT
In February 2018, the CBCR decided to further open the Chinese banking market and expand the scope of services of foreign banks in China. More research is needed on whether the introduction of foreign banks could stimulate the development of Chinese banking industry or bring in bad influence. The main purpose of a commercial bank is to make a profit, which is the basis of steady operation and expansion. By choosing Cost-Income ratio and Rate of Return on Common Stockholders’ Equity as indicators of profitability, external factors and internal factors are analyzed by Multiple Linear Regression, especially the Ratio of Foreign Banks to total assets. According to the results, the government should introduce foreign banks reasonably and rationally further more.
KEYWORDS
Foreign banks, Profitability, Multiple Linear Regression