Are New Tigers Supplanting Old Mammoths In China's Banking System? Evidence From A Sample Of City Commercial Banks

摘要

"New Tigers" (including city commercial banks) outperform state-owned commercial banks burdened with non-performing loan: from unprofitable state-owned enterprises. We study whether this is solely due to superior corporate governance (multiple shareholder; versus total government ownership) or also to the favorable environment (the New Tigers target affluent China, while state-owned commercial banks operate nationwide). Using a field survey on 20 city commercial banks from three provinces at different levels of economic development, we find bettei performance at those in the East and worse performance at those controlled by state-owned enterprises. Geography and policy do matter, and reform of state-owned commercial banks is necessary to bring better banking to China.