Operating Performance of Emerging Market Banks Around Stock Listing : Evidence from China

This paper examines the operating performance of Chinese banks surrounding the stock listing. The results show that while cross-border listed banks overall outperform domestically listed banks, the performances of regional (city and rural) banks and non-eastern coastal banks are inferior to those of national and eastern coastal headquartered banks after the cross-listing. However, additional tests disclose that regional banks and non-eastern banks have lower total risk after the stock listing. These results demonstrate that the stock listing affects both bank performance and bank risk, and that some banks list publicly to seek profitability improvement whereas others seek risk reduction