Working paper
Product Market Competition, Import Penetration, and Local U.S. Banks: Evidence from the Natural Experiment of China’s WTO Entry
SSRN
12/28/2022
Abstract
We analyze how the product market competition shock due to China’s WTO entry affected local U.S. banks across various regions. Using a difference-in-differences empirical strategy, we document that in regions with greater exposure to the shock, loan quality deteriorated and bank profitability declined more severely, coupled with slower loan growth and higher loan interest rates after the shock. Further, small banks lost market share and banking market concentration increased more in these regions. Overall, our paper documents, for the first time in the literature, how China’s WTO entry affected the local banking system in various U.S. regions.
Details
- Title: Subtitle
- Product Market Competition, Import Penetration, and Local U.S. Banks: Evidence from the Natural Experiment of China’s WTO Entry
- Creators
- Samar AshourThomas J ChemmanurXi LiJiajie Xu
- Resource Type
- Working paper
- Publisher
- SSRN
- Alternative title
- How Did China’s WTO Entry Affect the Local Banking System in the U.S.?
- Language
- English
- Date posted
- 12/28/2022
- Date updated
- 08/14/2023
- Academic Unit
- Finance
- Record Identifier
- 9984582459202771
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