Impact of foreign bank penetration on local firms’ export destination choices
Year: 2025
Type: article
Abstract: Exporting is an information-intensive activity in exploring the foreign markets. We use firm-level destination country-specific exporting data and bank branch data to show that foreign banks present in China can significantly promote local firms’ export toward the destination country where the banks are originated from. Specifically, foreign banks promote local firms’ export more strongly in sectors in need of more information and when a destination country is culturally or institutionally more distant. The promotion is significant for ordinary export but has almost zero impact on processing with assembly. Taken together, foreign banks serve as information providers and affect companies’ strategic decisions on their export location choices.
Authors: Hua Cheng, Hans Degryse, Shusen Qi, Yuanyuan Si
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4408896652