Empirical Study on Location Choice of Foreign Banks in China

Abstract

Using the panel data from 2006 to 2010, this paper analyses the determinants of location choice of foreign banks in China with the amount of assets of foreign banks in different regions as dependant variables. The empirical results show that market opportunity and following clients factors are both important determinants for foreign banks location choice. Meanwhile the presence of foreign banks tends to be more in financial centers of China, holding everything else being equal. However, the non-performing loan ratio of commercial banks of one region is not important factor for foreign banks to consider for now.