Keywords

bank, China, convergence, regulatory reform

Abstract

We examine the effect of regulatory reform on the asset allocation and capitalization of Chinese banks, 2002 to 2007, a period following China’s entry into the World Trade Organization (WTO). Our empirical evidence rejects the hypothesis that banks in the Big Four, majority state, majority private, and majority foreign categories have common targeted levels of loans and capital in relation to assets. With respect to rates of adjustment towards those targets, our evidence is mixed. Domestic banks exhibit convergence in behavior toward each other but remain distinct from majority foreign banks. Overall, our findings provide evidence that, while the structure of Chinese banking remained segmented after the WTO, a more uniform pattern of behavior has emerged for those Chinese banks that are domestically owned.

Original Publication Citation

Regulatory Reforms and Convergence of the Banking Sector: Evidence from China, with Drew Dahl, Hongjing Zhang, and Mingming Zhou, Managerial Finance, Vol. 40, Issue 10, 2014, 956-968.

Document Type

Peer-Reviewed Article

Publication Date

2010

Publisher

Managerial Finance

Language

English

College

Marriott School of Business

Department

Finance

University Standing at Time of Publication

Full Professor

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