Deepening financial opening-up helps to promote competition, exchange, and cooperation between domestic and foreign financial institutions, and promotes high-quality overseas financial institutions to invest in the Chinese financial industry, thereby enhancing the ability of the Chinese financial industry to serve the real economy. As an important component of China’s financial system, the banking industry plays a crucial role in supporting the development of China’s real economy. Since 2018, China’s financial industry has implemented intensive policies and measures to expand its opening-up to the outside world. Does it bring more opportunities or challenges to the development of China’s banking industry?
Based on this background, adopting the DID method, this paper takes the impact of expanding financial opening-up in 2018 as a quasi-natural experiment, and uses data from 36 listed commercial banks in China from 2016 to 2020 to test the impact and mechanism of deepening financial opening-up on the operating performance of commercial banks in China. The results show that the deepening of financial opening-up has significantly improved the operating performance of listed commercial banks. Specifically, compared to state-owned commercial banks, expanding financial opening-up has significantly promoted the operating performance of three types of commercial banks: joint-stock commercial banks, urban commercial banks, and rural commercial banks. Mechanism testing shows that deepening financial opening-up can improve bank performance through the knowledge spillover effect and the competition effect.
The marginal contributions of this paper are as follows: First, there is no consistent conclusion on the relationship between financial opening-up and bank operating performance in existing literature. This paper explores the impact of deepening financial opening-up on the operating performance of Chinese commercial banks based on the background of opening-up, enriching the research on this issue. Second, existing literature uses specific financial opening-up indicators or bank opening-up indicators to measure the degree of financial opening-up. This paper uses the DID method and the impact of the intensive implementation of financial opening-up measures in 2018 to evaluate policy effectiveness, accurately estimating the impact of deepening financial opening-up on bank operating performance. Third, this paper explores the impact and mechanism of the policy shock of expanding financial opening-up in 2018 on bank operating performance. Combined with the current background of China’s opening-up and banking operations, it provides reference for policy formulation by banks and regulatory authorities, and provides useful insights for further promoting financial opening-up and the development of the banking industry.