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Foreign bank entry and export quality upgrading: evidence from a quasi-natural experiment set in China

Author

Listed:
  • Teng Zhang

    (Southwestern University of Finance and Economics)

  • Yanlin Xing

    (Southwestern University of Finance and Economics)

  • Hua Shang

    (Southwestern University of Finance and Economics)

Abstract

This paper investigates the effect of foreign bank entry on the export quality of firms. For this purpose, we mainly use the transaction data from the Chinese Customs Database and the production data from the Annual Survey of Industrial Firms of China during the years 2000–2006. The obtained data consists of 62,483 observations gathered from 19,888 firms. The results show that foreign bank entry enhanced the export quality of firms that are more externally financially dependent. This influence is stronger for non-state-owned firms and ordinary-trade firms than for the other types of firms. We further demonstrate that foreign bank entry is mainly through promoting innovation endeavors and improving the quality of intermediate inputs yielding to enhance the export quality of firms that have more external financial requirements.

Suggested Citation

  • Teng Zhang & Yanlin Xing & Hua Shang, 2024. "Foreign bank entry and export quality upgrading: evidence from a quasi-natural experiment set in China," Empirical Economics, Springer, vol. 66(5), pages 1975-2005, May.
    • Handle: RePEc:spr:empeco:v:66:y:2024:i:5:d:10.1007_s00181-023-02513-8
    DOI: 10.1007/s00181-023-02513-8
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    More about this item

    Keywords

    Foreign bank entry; Export quality; External financial dependence; Innovation; Intermediate inputs;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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