Cooperation Satisfaction and Performance: Empirical Evidence from Chinese Banks and Their Foreign Strategic Investors

19 Pages Posted: 3 Jan 2011

See all articles by Chin-Hwa Lu

Chin-Hwa Lu

affiliation not provided to SSRN

Chung-Hua Shen

National Taiwan University - Department of Finance

Meng-Wen Wu

affiliation not provided to SSRN

Zhi-Wen Wu

affiliation not provided to SSRN

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Abstract

In this paper, we investigate whether the mutual satisfaction of Chinese banks and foreign strategic investors (FSI) in terms of their cooperation with each other affects the performance of Chinese banks. Since 2004, China's banking authority has conducted an annual survey on Chinese banks and their FSI, assessing levels of mutual satisfaction in terms of their cooperation. We use these survey results to examine the effects of satisfaction levels on the profitability of Chinese banks. Our results reveal that satisfaction affects profitability; that is, satisfied foreign investors and Chinese banks yield better performance. Satisfaction determinants for each party are also examined. Although the profitability of Chinese banks does not show a significant effect on the satisfaction of either party, bank loan to deposit ratios, regions of FSI home countries, and the type of Chinese banks are important factors that might affect satisfaction.

Keywords: bank performance, Chinese banks, foreign strategic investor, satisfaction

JEL Classification: G21, M21

Suggested Citation

Lu, Chin-Hwa and Shen, Chung-Hua and Wu, Meng-Wen and Wu, Zhi-Wen, Cooperation Satisfaction and Performance: Empirical Evidence from Chinese Banks and Their Foreign Strategic Investors. China & World Economy, Vol. 18, No. 6, pp. 90-108, 2010, Available at SSRN: https://ssrn.com/abstract=1734200 or http://dx.doi.org/10.1111/j.1749-124X.2010.01222.x

Chin-Hwa Lu (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Chung-Hua Shen

National Taiwan University - Department of Finance ( email )

1, Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

Meng-Wen Wu

affiliation not provided to SSRN ( email )

No Address Available

Zhi-Wen Wu

affiliation not provided to SSRN ( email )

No Address Available

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