Analysis Of Operational Efficiency Of Financial Institutions In Developed Areas In China--Based On The Relationship Between Bank And Firm

★ ?5 Analysis of operational efficiency of financial institutions in developed areas in China ?Based on the relationship between bank and Firm Hui-Juan Hong (College of Economics and Trade ,NAU,2 10095) Supervisors: Prof. Jinshun Zhang and Prof. Huanzhang Gu Abstract Upon the transition from planned economy to market economy in China, the commercialized management of bank has been brought into the agenda. Many rural financial institutions (including Agricultural Bank of China (ABC) and Rural Credit Cooperatives (RCC), as well as other banks) have been suffering the loss since a few years ago. However, very limited research on their operational efficiency, which is essential to distinguish and analyze the influence factors, has been done so far. This study will analyze the operational efficiency and the influencing factors of efficiency and behaviors of rural financial institutions in developed areas, taking developed provinces of Jiangsu and Zhejiang as examples. The study consists of 7 chapters, excluding the Introduction: In chapter 1, the established are an analysis theory frame of rural financial institution operational efficiency and an index system of operational efficiency. This index system consists of three categories: the indexes of financial contribution to rural development, the indexes of financial intermediary efficiency, and the indexes of financial institutions?micro efficiency and benefits. In chapter 2, the relationship between banks and firms is explored, with emphasis on the theoretical analysis of transactions between banks and firms using modem firm theory, including market theory, information theory, and transaction cost theory et aL, which supports analysis of transaction behavior between banks and firms discussed in chapter 6; In chapter 3?, the operational efficiency and it influencing factors of the rural financial institutions are thoroughly discussed. The data show that the operational efficiency of rural financial institutions has been decreased for last several years, and ABC and RCC are 搈ore cautious?to extend credits. The factors influencing efficiency and behaviors of rural financial institutions can be divided into two classes: macro-factors and micro-factors. The macro- factors include macroscopic financial policy, such as the interest rate policy, while micro- 146 factors include nature and characteristics, and structural refbrm of banks and finns. The followings are discussed: 1), the effect of macro-factors on operational efficiency of rural financial institutions; 2), the effect of nature and characteristics (such as management, incentive/monitoring mechanism) of financial institutions on their operational efficiency; 3), the effect of nature and characteristics (mainly firm reform) of finns on firm productivity, on firms?abilities to repay debts, and on operational efficiency and behaviors of financial institutions. In chapter 7, suggestions are proposed to raise operational efficiency of rural financial institutions. These suggestions include three aspects: credit environment optimization, credit system innovation, and policy suggestion. The preliminary conclusions of this study are: 1. The analysis of indexes of finance contribution to the...