The Calculation And Dynamic Change Analysis On Efficiency Of Chinese Commercial Banks

Efficiency is one of the core problems that the economics deals with. It is also the goal that commercial banks chase in their business administration. The efficiency of banking is not only in the individual bank's performance and its competence, but also the reflection of the intrinsic quality of the national economy development. The banking development depends on the efficiency in the long run, rather than the speed. After the entry to WTO, Chinese banking will be confronted with more fierce competitions between native and foreign banks. So it is meaningful in the theory and practice to do some work on the efficiency of Chinese banking.After the review of some related researches on foreign and native banking, this thesis first utilized the data envelope analysis method (DEA) to calculate the cost efficiency, the allocative efficiency and the technical efficiency of Chinese commercial banks(4 state-owned commercial banks and 11 newly founded joint-stock commercial banks) during the periods of 2002 to 2004. The thesis made the detailed analysis to present situation of cost efficiency and the origin of cost inefficiency. Then the thesis made the computation to the total factor productivity of Chinese banking industry during the periods of 1999 to 2004 through the introduction Malmquist index analysis based on DEA. Through the quantitative analysis, the conclusions which the thesis drew are as follows:(1) The efficiency of the newly founded joint-stock commercial banks is higher than the state-owned commercial banks in general, but the tendency of the gap is reducing.(2) Compared 2002 with 2003, the efficiency of the Chinese banking industry has an increasing tendency, but compared 2003 with 2004, the efficiency of the newly founded joint-stock commercial banks is invariable in general and the efficiency of the state-owned commercial banks is reducing.(3) The cost inefficiency of the state-owned commercial banks mainly roots in the technical inefficiency, but that of the newly founded joint-stock commercial banks mainly roots in not only technical inefficiency but also allocative inefficiency.(4) The newly founded joint-stock commercial banks are in the stage of constantreturn to scale or increasing return to scale, while the state-owned commercial banks are mainly in the stage of decreasing return to scale.(5) The total factor productivity of Chinese banking industry has grown by 9.3% annually during the periods of 2002 to 2004, and it showed that the productivity of Chinese commercial banks had been enhanced quickly in recent years.(6) The growth of Chinese banking industry's productivity is mainly caused by the technical change (frontier shift). This showed that the competition of the banking industry had been enhanced and the innovation behavior (namely frontier shift effect) of the banks would increase the productivity of the banks with the loosing control on the banks in recent years.