关键词: 商业银行跨区经营, 省际贸易流动, 信息溢出

Abstract: Inter-provincial trade has been a powerful engine behind economic growth under the new development pattern in China. Inter-provincial trade patterns can not only reflect the comparative advantages and division networks of trading regions, but also help to identify the feedback effects of regional economic influences, drawing a meaningful implication for the coordinated regional economy development. Existing literature focusing on the influencing factors of interregional trade has widely supported that the trade patterns are significantly determined by statically district differences in factor endowments. However, how the development of financial markets contributes to trade is a relatively unexplored area of the trade theory.
   In fact, a well-developed financial market has long been confirmed as one of the vital determinants of market integration. The theoretical conjecture that financial development would matter for economic growth has pointed out that the higher degree of financial market development may promote specialized production in a country or a region, and benefit industries with increasing returns to scale by optimizing the allocation of capital and mobilizing and pooling savings, which in turn affects its trade patterns.
   Following the line of the reasoning, this paper empirically examines how the commercial banks’ multi-regional operations may impact trade patterns across province-pairs, by employing the No. 143 deregulation policy on entrants and outlets’ expansion of commercial banks at the prefecture-level in China as a natural experiment. We pair 30 China’s provinces using the 2007 and 2012 inter-regional input-output data, and find that the geographical diversification of banks induced by the deregulation increases both the volumes and shares of inter-provincial trade in China through information spillover benefits. It is also found that such favorable effect is especially stronger for the central and western regions with lower level of financial development and less customer base advantages of city commercial banks. In addition, we show a heterogeneous effect of banks’ cross-regional expansion across industry sectors. As the market opens up, multi-regional banks would facilitate external financing conditions of the trading and capital-intensive sectors by easing information frictions, thus enhancing the overall activeness of trade flows across regions. Finally, we argue that the banking integration effect on inter-provincial trade actually is different, depending on bank types in different regions. The benefits of multi-market city commercial banks are only available for the inter-provincial trade across central and western regions.
   We expect to contribute to existing literature in three important ways. Firstly, this paper identifies the mechanisms underlying the linkage between multi-market banking and inter-provincial trade. Banks are generally believed to be efficient information producers. The advantage that multi-regional banks possess in resolving information problems has implications for trade across regions since it would be more effective in collecting soft information on borrowers and reducing screening and monitoring costs through widely dispersed operations in different economic environments. Secondly, this paper offers additional evidence on the pivotal role of banking in establishing dynamic comparative advantage of trade through a more efficient resources allocation. Trading and capital-intensive industrial sectors enjoy a greater benefit from banking integration, and the easier financial access to the sectors gives rise to a pattern of credit advantage which determines trade structure across regions. Thirdly, this paper shows the heterogeneity of banking deregulation effects at the provincial level in China. Banking market characteristics have an intrinsically ambiguous effect on economic growth. Only when taking into consideration of multi-dimensional perspectives in a unified analysis framework covering the characteristics of both banking market and real economy, can we comprehensively grasp the theme of operating mechanism in the relationship between banking development and economic growth.
   Overall, this paper demonstrates an importance of finance in the integration of interregional trade, where factor mobility and reasonable allocation could be enhanced with the space overall arrangement of finance. It provides additional empirical evidence on finance-growth nexus, and may offer an enlightenment for policy making aiming at improving financial efficiency and unifying the national market in China.

Key words: commercial banks’ multi-regional operations, inter-provincial trade, information spillover