| ID | 140233 |
| Title Proper | Impact of foreign bank presence on foreign direct investment in China |
| Language | ENG |
| Author | Qin, Fengming ; Ongena, Steven ; Qi, Shusen |
| Summary / Abstract (Note) | We analyze the impact of foreign bank presence on foreign direct investment (FDI) in China. The connection between the two could be particularly relevant for an emerging economy like China because the supply of financial services provided by banks may act as a constraining factor. Foreign bank presence may then enable and foster FDI and not simply result from it. Our estimates demonstrate that FDI 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. The effect of foreign bank presence on FDI is particularly strong for some specific sectors (farming, manufacturing, construction, transportation, wholesale/retail trade and real estate) if those sectors are strongly represented in the source economies. |
| `In' analytical Note | China and World Economy Vol. 23, No.4; Jul/Aug 2015: p.40–59 |
| Journal Source | China and World Economy 2015-08 23, 4 |
| Key Words | China ; Foreign Direct Investment ; Foreign Bank Presence |