Research On Scale Economies Of Commercial Banks Based On DEA Model

Under the trend of finance liberalization, the idea that the bigger the scale is, the better the bank is spreads in the international banking industry. The scale of banks and their effect have attracted the increasing attention of the knowledgeable personal. This article intended to study the scale economy of China commercial banks systematically and deeply. Through the research, I hope it can give the theories to support China commercial banks' developing scale economies by merging, constructing internet banks and so on. Meanwhile, I think it can do some good to supervisory authority in the course of devising finance policy.Firstly, this paper defined the conception of scale economies of commercial banks over again after describing the relative conception of scale economies. At the same time, it analyzed the facts of affecting commercial banks' scale economies. Through comparing the scale between overseas banks and domestic ones, it analyzed the actualities of scale economies of internal commercial banks by using qualitative analysis. Secondly, after comparing the methods of studying the scale of economies, it advanced the standard of selecting a method to study scale economies. After introducing the Tobit model, this paper established the method - two-stage DEA model to study the scale economies of commercial banks. At last, this paper utilized the improved DEA model to make an overall analysis on the scale efficiency of Chinese commercial banks from 1999 to 2001. It concluded that the scope of scale on domestic commercial banks is large. If increasing the quality of assets, commercial banks have great potential development on bank scale economies.At the end of this paper, it put forward several solutions to improve the scale efficiency of domestic commercial banks. It also concluded that the revolution of property right is system guarantee, emerge is an effective approach, increasing technology and quality of assets is root route.