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Foreign Strategic Investors, State Ownership, and Non-interest Activities: Evidence from China

Maoyong Cheng, Hong Zhao and Mingming Zhou

Journal of Financial Stability, 2020, vol. 50, issue C

Abstract: This paper contributes to the literature on foreign strategic investors (FSIs) by examining the influence of FSIs on non-interest activities. Using data from China’s banks for 2001–2016, we find that FSI entry is associated with significantly increased non-interest activities, especially commission and fee activities, of Chinese banks. Furthermore, local banks with directors appointed by FSIs have increased non-interest activities. Moreover, in state-owned banks, the effects of FSIs and directors assigned by FSIs on non-interest activities are both weaker. We also find that non-interest activities have not significantly changed after the exit of FSIs. These empirical findings will be informative and relevant to both policymakers and practitioners.

Keywords: Foreign strategic investors; State ownership; Non-interest activities; China (search for similar items in EconPapers)
JEL-codes: G21 G32 G34 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.jfs.2020.100779

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Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman

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