Entry of foreign banks in Shanghai: implications for business strategies in an increasingly competitive market

M.K. Leung and T. Young
Additional contact information
M.K. Leung: School of Accounting and Finance, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, People's Republic of China, Postal: School of Accounting and Finance, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, People's Republic of China
T. Young: School of Economic Studies, University of Manchester, Manchester M13 9PL, England, UK, Postal: School of Economic Studies, University of Manchester, Manchester M13 9PL, England, UK

Managerial and Decision Economics, 2005, vol. 26, issue 6, 387-395

Abstract: This paper uses a simple mean-variance choice model as the basis of a duration analysis of the factors determining the decision of a foreign bank to establish a branch in Shanghai, the fast developing financial centre in China. Bank attributes, namely region of origin, parent bank size, the number of international branches and their branch network in China, have a significant impact on the time to entry. A country's share of total foreign direct investment in Shanghai also significantly affects the entry decision. The attributes facilitating entry also provide the foreign bank with a competitive advantage in its foreign currency transactions in Shanghai. However, with the ensuing market liberalisations after China's WTO accession, the entrants' competitiveness may not be sustained in the local currency market, especially following the proactive business strategies of Chinese banks and the protectionist measures of the government. It is expected that only a small number of the entrants will be able to emerge as big market players in the growing domestic currency market in Shanghai. Copyright © 2005 John Wiley & Sons, Ltd.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1235 Link to full text; subscription required (text/html)

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:wly:mgtdec:v:26:y:2005:i:6:p:387-395

DOI: 10.1002/mde.1235

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().