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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2009, Vol. 4 Issue (1) : 76-96    https://doi.org/10.1007/s11459-009-0005-4
research-article |
Resident’s comparative assessment on domestic versus foreign financial institutions: Evidence from nine cities in China
LI Tao1(), HE Xingqiang2, ZHOU Kaiguo3
1. School of Finance, Renmin University of China, Beijing 100872, China; 2. Lingnan College, Sun Yat-sen University, Guangzhou 510275, China; 3. Lingnan College, Sun Yat-sen University, Guangzhou 510275, China
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Abstract

Between domestic financial institutions and foreign or joint venture ones in China, which ones do Chinese people give better assessment to? And what factors affect those comparative assessments? With a household survey in nine cities in China in 2006, we find that China’s domestic financial institutions are considered better than foreign or joint venture ones in terms of financial products, communication with investors, security and prudence, operation standardization and service attitudes. When taken into account the endogeneity of people’s trust on government regulation agencies, empirical results show that people’s more attention to returns or the more trust on government regulation agencies leads to their better assessments on domestic financial institutions than foreign or joint venture ones. The policy implications are: Chinese governments have to take measures to improve residents’ trust in governmental regulation and create a fair competition environment for domestic and foreign financial institutions in China. Domestic and foreign financial institutions make efforts to develop a higher rate-of-return and attractive financial products to service more customers.

Keywords Chinese-owned financial institution      foreign financial institution      rate of return on capital      trust     
Corresponding Authors: LI Tao,Email:econlitao@gmail.com   
Issue Date: 05 March 2009
 Cite this article:   
LI Tao,HE Xingqiang,ZHOU Kaiguo. Resident’s comparative assessment on domestic versus foreign financial institutions: Evidence from nine cities in China[J]. Front Econ Chin, 2009, 4(1): 76-96.
 URL:  
http://academic.hep.com.cn/fec/EN/10.1007/s11459-009-0005-4
http://academic.hep.com.cn/fec/EN/Y2009/V4/I1/76
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