The Empirical Research On The Relationship Between Efficiency And Stock Returns Of China's Listed Banks

Currently, there are many schools of studies of the stock in the literature review. Some think people are irrational when they are making decisions, which leads to the inefficiency of the market, so that it is infeasible to study the stock market with the scientific methods. The others believe the market is effective because the trend of the stock could show the corporate information. People could make out the evaluation is proper or not by research and buy low and sell high. The choice of modes and capital returns would influence the results to a great extent when using it.This paper firstly does the empirical study between the efficiency of the banks and the stock returns based on the semi-strong market of the stock market. From the aspect of banks, we try to find a better way to study the corporate stocks through the research of the relationship of the bank efficiency and the stock returns. The reason why we introduce the efficiency is that efficiency research is an important area as well as the target of the listed companies. The effective company pursues the minimum input and the maximum output. Efficiency reflects not only the operating performance but the competitiveness. In a long run, the development of one company is up to the efficiency instead of the speed. This paper measures 11 seasons of the 14 banks of China, from 2008 to the third season of 2010, from the perspectives of technical efficiency, pure-technical efficiency and efficiency of scale and computes the stock returns during that period with the data envelopment analysis based on the past research. Then, we analyze the results of efficiency by window analysis and evaluate the relationship between the bank efficiency and the stock returns. The empirical study shows that the large banks have higher pure-technical efficiency and the small and middle sized banks have higher technical efficiency and efficiency of scale. The empirical study of the relationship of the bank efficiency and stock returns show that technical and pure-technical efficiency are significantly related to the stock returns, which means the stock prices could reflect the information of the technical efficiency and pure-technical efficiency of commercial banks but could not reflect the efficiency of scale.