Abstract
Profitability of China’s commercial banks has increased significantly since it joined the World Trade Organization (WTO). Constantly advancing of deepening the reform and increasingly fierce of international competition make us to be concerned more about macroeconomic factors. This paper makes an empirical analysis with a panel of 10 Chinese listed banks during the period 1998- 2012 to make a study of the potential impact of external factors may bring to China’s capital market. The results confirm that macroeconomic do have a substantial influence to the earning power of commercial banks, according to which some suggestions are made at the end of the paper.
Highlights
Since joining the World Trade Organization (WTO) in 2001, most of the Chinese commercial banks completed the shareholding reform and established a modern enterprise system through processes like financial restructuring, the introduction of strategic investors and public listing
This paper aims at researching on the potential impact of external macroeconomic factors may bring to China’s capital market and making appropriate policy recommendations by using theoretical and empirical analysis
This paper makes an empirical analysis with a panel of 10 Chinese listed banks during the period 1998-2012 to make a study of the potential impact of external factors may bring to China’s capital market
Summary
Since joining the WTO in 2001, most of the Chinese commercial banks completed the shareholding reform and established a modern enterprise system through processes like financial restructuring, the introduction of strategic investors and public listing. Asset size, asset quality and profitability of the banking sector have improved significantly. With the constantly advancing of deepening the reform and increasingly fierce of international competition, it becomes an urgent task to improve the profitability and enhance the competitiveness of commercial banks. This paper aims at researching on the potential impact of external macroeconomic factors may bring to China’s capital market and making appropriate policy recommendations by using theoretical and empirical analysis.
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