IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v48y2025i3p416-449.html
   My bibliography  Save this article

Growing beyond trade: Export shocks and the spatial expansions of bank branching

Author

Listed:
  • Jie Li
  • Angdi Lu

Abstract

This paper empirically examines the impact of tariff reductions for exporters on banks' location choices with geo‐referenced information on subsidiaries and branches of China's state‐owned and joint‐stock banks. We construct prefecture‐level tariff barrier changes faced by exporters from 2001 to 2007 and identify the impact by exploiting within‐bank cross‐prefecture changes in bank branching patterns. The empirical results suggest a positive and significant pass‐through from export expansion to banks' geographic expansion. Specifically, a 10% export tariff reduction would induce a 1.88% increase in the local number of bank branches. This result holds under a battery of robustness tests. Mechanism tests suggest that increased credit demand in the corporate sector, both at the intensive and extensive margins, is the main channels that explain the baseline patterns. The findings in this paper offer valuable insights into the relationship between internationalisation and financial development.

Suggested Citation

  • Jie Li & Angdi Lu, 2025. "Growing beyond trade: Export shocks and the spatial expansions of bank branching," The World Economy, Wiley Blackwell, vol. 48(3), pages 416-449, March.
    • Handle: RePEc:bla:worlde:v:48:y:2025:i:3:p:416-449
    DOI: 10.1111/twec.13659
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.13659
    Download Restriction: no
    File URL: https://libkey.io/10.1111/twec.13659?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:48:y:2025:i:3:p:416-449. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.