Total Factor Productivity Measurement Of China's Bank Industry

During 2002 to 2009, China's banking industry achieved a good development resulting from a large scale reform itself. However the external environments have a big impact on China's banking industry during this time: with the large-scale entry of foreign banks and the global financial crisis events take pressure in the operation and development to banking industry; government control the overheating macroeconomic also results in some negative effects on the operational efficiency of the banking sector; China's financial market which gradually improved diversifies funding sources leading profit of the banking industry threatened. For the banks, enhancing their competitiveness is the only way in the future. Therefore, this paper selects the bank's total factor productivity(TFP) as the research objects. By analyzing the TFP of China's banking industry we can analyze the status of China's banking sector and evaluate the levels of efficiency of China's banking industry in the face of the negative external environment. And through the result we can illustrate the way to improve the China's banking industry.According to China's specific situation, this paper based on the reviewing a variety of banking efficiency evaluation methods select the three-stage malmquist index model to conduct an empirical study of TFP in China's banking industry. We take the 14 commercial banks during 2002~2009 as the research sample, and select the property rights structure, length and branch number as the environment variables. Through the adjustment of SFA model in the second phase, then we re-use the Malmquist model to calculate the true value of the sample banks. Comparing the efficiency of value before and after adjustment, we can get the following conclusions: the TFP of the sample banks increased during this time, while this increase mainly resulting from the technological progress; as for the increase rate of the TFP, the joint-stock commercial banks is higher than the state-owned commercial banks; as for the the increase rate of the level of management, the joint-stock commercial banks is lower than the state-owned commercial banks; state-owned commercial banks have a better ability to against risk than the joint-stock commercial banks; the environmental variables of the sample banks have the negative impact to the input variables on the average which leading the traditional Malmquist model underestimation the TFP of the sample banks.Finally, the paper summarized the research results. And based on empirical studies conclusions proposed enhancing the competitiveness of the banking industry's policy recommendations from the aspects of the scale of banks, risk management, credit fund management, the development of intermediary business, personnel system for construction, development of financial market innovation and small and medium banks carefully to be listed.