Chinese Investment under China–Pakistan Economic Corridor: Implications on Banking Performance in Pakistan

Sabeeh Ullah, Muhammad Zia and Rauf Gul

Public Finance Quarterly, 2021, vol. 66, issue 4, 568-583

Abstract: This study empirically examines the relationship of Chinese Foreign Direct Investment (CFDI) under the China-Pakistan Economic Corridor (CPEC) and commercial bank performance in Pakistan, thereby highlighting the un-explored area of the existing literature. For this purpose, a panel dataset over the period 2009 to 2020 of commercial banks was collected from the State Bank of Pakistan. We have employed various econometric techniques including random effect and System Generalized Method of Movement (Sys-GMM). To more accurately analyse the relationship between CFDI and bank performance, we also separately examined the pre-CPEC period 2009-2013, and the post-CPEC period 2014 to 2020. The results indicate a significant positive impact of Chinese FDI on the banking performance in Pakistan in full as well as in Pre-CPEC samples, while negatively significant with banking performance in Post-CPEC samples. For the control variables, we found some variations in signs and significance across the various bank performance measures and the three samples. This unique outcome of the study is very important for the policymakers of developing countries in general and Pakistan in particular.

Keywords: Foreign Direct Investment; CPEC; Bank Performance; Sys-GMM; Pakistan (search for similar items in EconPapers)
JEL-codes: C33 F21 G21 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://unipub.lib.uni-corvinus.hu/8608/ (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pfq:journl:v:66:y:2021:i:4:p:568-583

DOI: 10.35551/PFQ_2021_4_7

Access Statistics for this article

More articles in Public Finance Quarterly from Corvinus University of Budapest Contact information at EDIRC.
Bibliographic data for series maintained by Adam Hoffmann ().