Chinese banks' huge branch network imposes great pressure on foreign banks that enter through Greenfield Investment.In order to capture this influence,this paper develops a model of credit competition among branches,where branches affect both deposits and loans and therefore banks'loan expansions face deposit fund constraints.The conclusions are: (1) foreign bank's branch shortage restricts its development; however (2) the foreign bank with more branches can better make use of its technological advantages,market opportunities,and the improvements of those two aspects; (3) with all else being equal,the marginal profit of foreign bank's branch investment decreases with its branch quantity,however,better credit market makes it higher for the marginal profit of the foreign bank with the same branch quantity.
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