The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks

Tingting Wu; Yanbin Wu

doi:doi:10.11648/j.jfa.20170503.11

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The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks

Tingting Wu, Yanbin Wu

Published in Journal of Finance and Accounting (Volume 5, Issue 3)

Received: 4 May 2017 Accepted: Published: 4 May 2017

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Abstract

Chinese banking industry speeds up the process of internationalization as the global economy integrates and Chinese government accelerates the going out strategy. Many Chinese commercial banks explore overseas market by setting up new branches or merge and acquisition. Under the background, this paper uses empirical study to analyze the relationship between the degree of banks’ internationalization and business performance. Firstly, principal component analysis is applied to measure the degree of banks’ internationalization. Then, the paper constructs two models to analyze the panel data of five state-owned commercial banks, the second one with financial crisis as dummy variable. The results indicate that there is a U-shape relationship between the degree of banks’ internationalization and business performance in the first model without dummy variable. In the second model adding dummy variable, the financial crisis not only deteriorates Chinese commercial banks’ performance, but also makes the relationship between degree of internationalization and business performance become negative in 2008 while the degree of internationalization has positive influence on operational performance in years except for 2008.

Published in	Journal of Finance and Accounting (Volume 5, Issue 3)
DOI	10.11648/j.jfa.20170503.11
Page(s)	87-95
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

The Degree of Internationalization, Business Performance, Financial Crisis

References

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[2]	Michel, A. & Shaked, I 1986, ‘Multinational corporations vs. domestic corporations: financial performance and characteristics’, Journal of International Business Studies, vol.18, pp.89-100.
[3]	Collins, JM 1990, ‘A. market performance comparison of u. s. firms active in domestic developed and developing countries’, Journal of International Business Studies, vol.21, pp.271-287.
[4]	Capar, N. & Kotabe, M. 2003, ‘The relationship between international diversification and performance in service firms’, Journal of International Business Studies, vol.34, pp.345—355.
[5]	Ruigrok, W, Amann, W, & Wagner, H. 2007, ‘The internationalization- performance relationship at swiss firms: a test of the s-shape and extreme degrees of internationalization’, Management International Review, vol.47, pp. 349-368.
[6]	Junyun, Q. 2011, ‘Research on relationship between degree of internationalization and enterprise performance in China from a resource perspective’, Master paper, Beijing Jiaotong University.
[7]	Meng, H, Jian, Q. & Wendong, X. 2011, ‘The internationalization of Chinese banks: status and strategy selection’, The Banker, no.11, pp.67-69.
[8]	Ting, L. & Delian F. 2012, ‘Empirical study on the relationship between internationalization and business performance of Chinese manufacturing companies’, Journal of Yunnan Finance & Economics University, vol.27, no.3, pp. 94-100.
[9]	Lingyu, M. 2013, ‘Empirical study on factors affecting Chinese commercial banks’ business performance’, Journal of Finance and Economics, no.02, pp.55-58.
[10]	Haixi, J. & Ying, J. 2014, ‘Study on the internationalization development stages of China’s state-owned commercial banks’, Economic Perspectives, no.08, pp. 90-96.
[11]	Dong, C. & Jianhan, W. 2016, ‘The internationalization strategy of private enterprises, heterogeneous of investors and firm performance’, Journal of Shanxi University of Finance and Economics, vol.38, no.4, pp.74-86.

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Tingting Wu, Yanbin Wu. (2017). The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. Journal of Finance and Accounting, 5(3), 87-95. https://doi.org/10.11648/j.jfa.20170503.11

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Tingting Wu; Yanbin Wu. The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. J. Finance Account. 2017, 5(3), 87-95. doi: 10.11648/j.jfa.20170503.11

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AMA Style

Tingting Wu, Yanbin Wu. The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. J Finance Account. 2017;5(3):87-95. doi: 10.11648/j.jfa.20170503.11

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@article{10.11648/j.jfa.20170503.11,
  author = {Tingting Wu and Yanbin Wu},
  title = {The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks},
  journal = {Journal of Finance and Accounting},
  volume = {5},
  number = {3},
  pages = {87-95},
  doi = {10.11648/j.jfa.20170503.11},
  url = {https://doi.org/10.11648/j.jfa.20170503.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170503.11},
  abstract = {Chinese banking industry speeds up the process of internationalization as the global economy integrates and Chinese government accelerates the going out strategy. Many Chinese commercial banks explore overseas market by setting up new branches or merge and acquisition. Under the background, this paper uses empirical study to analyze the relationship between the degree of banks’ internationalization and business performance. Firstly, principal component analysis is applied to measure the degree of banks’ internationalization. Then, the paper constructs two models to analyze the panel data of five state-owned commercial banks, the second one with financial crisis as dummy variable. The results indicate that there is a U-shape relationship between the degree of banks’ internationalization and business performance in the first model without dummy variable. In the second model adding dummy variable, the financial crisis not only deteriorates Chinese commercial banks’ performance, but also makes the relationship between degree of internationalization and business performance become negative in 2008 while the degree of internationalization has positive influence on operational performance in years except for 2008.},
 year = {2017}
}

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TY  - JOUR
T1  - The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks
AU  - Tingting Wu
AU  - Yanbin Wu
Y1  - 2017/05/04
PY  - 2017
N1  - https://doi.org/10.11648/j.jfa.20170503.11
DO  - 10.11648/j.jfa.20170503.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 87
EP  - 95
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20170503.11
AB  - Chinese banking industry speeds up the process of internationalization as the global economy integrates and Chinese government accelerates the going out strategy. Many Chinese commercial banks explore overseas market by setting up new branches or merge and acquisition. Under the background, this paper uses empirical study to analyze the relationship between the degree of banks’ internationalization and business performance. Firstly, principal component analysis is applied to measure the degree of banks’ internationalization. Then, the paper constructs two models to analyze the panel data of five state-owned commercial banks, the second one with financial crisis as dummy variable. The results indicate that there is a U-shape relationship between the degree of banks’ internationalization and business performance in the first model without dummy variable. In the second model adding dummy variable, the financial crisis not only deteriorates Chinese commercial banks’ performance, but also makes the relationship between degree of internationalization and business performance become negative in 2008 while the degree of internationalization has positive influence on operational performance in years except for 2008.
VL  - 5
IS  - 3
ER  -

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Author Information

Tingting Wu

School of Finance, Shanghai University of International Business and Economics, Shanghai, China
Yanbin Wu

School of Law, Fudan University, Shanghai, China

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APA Style

Tingting Wu, Yanbin Wu. (2017). The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. Journal of Finance and Accounting, 5(3), 87-95. https://doi.org/10.11648/j.jfa.20170503.11

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ACS Style

Tingting Wu; Yanbin Wu. The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. J. Finance Account. 2017, 5(3), 87-95. doi: 10.11648/j.jfa.20170503.11

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AMA Style

Tingting Wu, Yanbin Wu. The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks. J Finance Account. 2017;5(3):87-95. doi: 10.11648/j.jfa.20170503.11

Copy | Download

@article{10.11648/j.jfa.20170503.11,
  author = {Tingting Wu and Yanbin Wu},
  title = {The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks},
  journal = {Journal of Finance and Accounting},
  volume = {5},
  number = {3},
  pages = {87-95},
  doi = {10.11648/j.jfa.20170503.11},
  url = {https://doi.org/10.11648/j.jfa.20170503.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170503.11},
  abstract = {Chinese banking industry speeds up the process of internationalization as the global economy integrates and Chinese government accelerates the going out strategy. Many Chinese commercial banks explore overseas market by setting up new branches or merge and acquisition. Under the background, this paper uses empirical study to analyze the relationship between the degree of banks’ internationalization and business performance. Firstly, principal component analysis is applied to measure the degree of banks’ internationalization. Then, the paper constructs two models to analyze the panel data of five state-owned commercial banks, the second one with financial crisis as dummy variable. The results indicate that there is a U-shape relationship between the degree of banks’ internationalization and business performance in the first model without dummy variable. In the second model adding dummy variable, the financial crisis not only deteriorates Chinese commercial banks’ performance, but also makes the relationship between degree of internationalization and business performance become negative in 2008 while the degree of internationalization has positive influence on operational performance in years except for 2008.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - The Relationship Between International Diversification and Business Performance of Chinese Commercial Banks
AU  - Tingting Wu
AU  - Yanbin Wu
Y1  - 2017/05/04
PY  - 2017
N1  - https://doi.org/10.11648/j.jfa.20170503.11
DO  - 10.11648/j.jfa.20170503.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 87
EP  - 95
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20170503.11
AB  - Chinese banking industry speeds up the process of internationalization as the global economy integrates and Chinese government accelerates the going out strategy. Many Chinese commercial banks explore overseas market by setting up new branches or merge and acquisition. Under the background, this paper uses empirical study to analyze the relationship between the degree of banks’ internationalization and business performance. Firstly, principal component analysis is applied to measure the degree of banks’ internationalization. Then, the paper constructs two models to analyze the panel data of five state-owned commercial banks, the second one with financial crisis as dummy variable. The results indicate that there is a U-shape relationship between the degree of banks’ internationalization and business performance in the first model without dummy variable. In the second model adding dummy variable, the financial crisis not only deteriorates Chinese commercial banks’ performance, but also makes the relationship between degree of internationalization and business performance become negative in 2008 while the degree of internationalization has positive influence on operational performance in years except for 2008.
VL  - 5
IS  - 3
ER  -

Copy | Download