Empirical Study on X Efficiency in Commercial Banks of China
|Keywords||X efficiency commercial bank branch and sub-branch DEA SFA|
Chinese commercial banks have an important role in financial market, its efficiency could influence the allocative effect of social resource directly. Nowadays, the study on commercial efficiency turned to the study of X efficiency from the old-time study of scale efficiency and scope efficiency. Commercial banks operation is something like a black box. With the same inputs, different banks come out with extraordinarily different financial products and services. X efficiency represents a comprehensive reflection of different banking resource allocation. This doctoral dissertation mainly focus the empirical study on X efficiency in commercial bank of china, aimed to helping commercial banks improve their core competition and give some advices for policy makers and bank supervision authority.The empirical results and conclusions are as follows:1.The cost x efficiency in commercial banks of china varies with each other, but reveals that it has trend wholly keeps rising with wavilness. the cost x efficiency in joint-stock banks is higher than those in state-owned banks in historical average, is lower than those in state-owned banks after the financial reform in state-owned banks. the cost x efficiency in state-owned banks have a significant rise. now, the cost x efficiency in Industrial and Commercial Bank of China(ICBC) equals to those in Bank of China(BOC), those in China Construction Bank(CCB) ,it is lower only in Agricultural Bank of China(ABC).2.The ratio of nonperforming loans (RNL) and the ratio of loan-deposit (RLD) have a great influence on the X efficiency ,over high RNL and RLD not only increase the cost of bank ,but also lead to double lowness in cost x efficiency and in profit efficiency.3. The X efficiency in branch and sub-branch banks of Agricultural Bank of China is strongly influenced by the development of economic in areas. The branch and sub-branch bank is more and more efficient with more and more development economic. The X efficiency in old industry bases provinces and in super agricultural provinces is lower than the best efficiency in developed provinces and lower than those in the early-liberated, minority nationality, border and poor provinces, mainly due to the over high RNL by historical policy.4. The X efficiency estimated by stochastic frontier approach (SFA) is the same to those by data envelopment analysis (DEA) in sort order, but differs with each other in estimated value. If aiming to estimate what position the bank’s cost efficiency is in industry location, either of two approach can do it, if aiming to estimate the other efficiency including scale efficiency and scope efficiency, DEA can do it better, if aiming to estimate the time trend of X efficiency, SFA can do it better, when sample data whose asset differs a lot from each other, SFA is much more appropriate.This essay is divided into seven parts, the main content is as follows:Chapter one: Literature review of the efficiency of commercial banks. Mainly survey in efficiency estimate, efficiency influence factor, foreign and domestic efficiency study of commercial banks and point out their problems.Chapter two: Theory of commercial bank. Based on classical theory of commercial bank, Emphasize efficiency theory and X efficiency theory.Chapter three: Approach of X efficiency study in commercial bank. Emphasize DEA and SFA approach, including model building, variable choosing, producing function, make a comparative analysis between DEA and SFA.Chapter four: Empirical study on X efficiency in Chinese commercial bank based on DEA. Choosing four state-owned banks and ten joint-stock banks, using their financial data between 1997 to 2005, adopting DEA ,first estimate the cost X efficiency and technological efficiency, then study the time trend of X efficiency by working in Malmquist,finally, study the efficiency influence factor by Panel model.Chapter five: Empirical study on X efficiency in Chinese commercial bank based on SFA. Adopting translog function, utilizing Battese and Coelli(1995) model, adding some relating efficiency influence factor to non efficiency variable in model, estimate the cost x efficiency. At the end of chapter five, compare these two approaches.Chapter six:Empirical study on X efficiency in branch and sub-branch bank of Agricultural Bank of China(ABC). Based on the empirical conclusion of chapter four and chapter five, Choosing 30 province branch banks of ABC, using cross data in 2006, estimate cost x efficiency and profit x efficiency. Emphasize some efficiency influence factor in branch and sub-branch bank of ABC.