Research On The Efficiency Of Chinese Commercial Banking Industry

Efficiency is the centralized reflection of the competition ability of commercial banks, which is the key element to defence financial risk and open up the banking industry. In this dissertation, we propose Data Envelopment Analysis (DBA) approach to evaluate the technical efficiency, pure technical efficiency and scale efficiency (1999-2000) of the fourteen Chinese commercial banks. We further conduct regression analysis on efficiency determinants.The empirical result of the DBA model shows that the average technical efficiency, pure technical efficiency and scale efficiency of the Joint-Stock commercial banks are higher than that of the Solely-Stated-Own commercial banks, of which the technical efficiency is ten percent higher, while the difference of the pure technical efficiency between the two kinds of the banks is narrow, and so is the difference of scale efficiency. The regression analysis result indicates that several factors affect the level of the efficiency of Chinese commercial banks, including the lack of a good profit-making model, the defects of the organization established according to the administration system, and the inefficiency of the single property-rights system. We also put emphasis on the efficiency comparison between the Stated-Owned commercial banks and the Joint-Stock commercial banks, from technology improvement, resource allocation and property-rights system, probing into the reasons for the efficiency difference. In regard to the above, this dissertation bring up some methods to enhance Chinese commercial banks efficiency: establishing an efficient market structure of commercial banking industry, refounding a good profit-making model, reconstructing banking organization and reforming the property-rights structure of Stated-Own commercial banks.