Study On The Efficiency Of Chinese Securities Companies With Data Envelopment Analysis

Efficiency greatly reflects the competition ability of securities companies. Having high efficiency means that securities companies can make good use of their resources. At present, the majority of Chinese researchers study the efficiency of securities companies with traditional financial index. However, the financial index is too simple and it can't reflect the efficiency completely.This paper measures the efficiency of Chinese securities companies with Data Envelopment Analysis. And it also analyzes the elements which influence the efficiency of securities companies in order to open the "black box" of companies' operation.The innovation of this paper includes: (1) measurement of the efficiency with Data Envelopment Analysis; (2) sorting Chinese securities companies according to the DEA efficiency; (3) depicting the change of efficiency with Malmquist index; (4) empirical and theoretical analysis of elements which are linked to efficiency for Chinese securities companies.The conclusions of this paper include: (1) there are no evident scale economy in Chinese securities companies; (2) the efficiency increased slightly from 2003 to 2004, while decreased greatly from 2004 to 2005; (3) the quality of assets and the structure of operations are two major factors influencing the efficiency of Chinese securities companies; (4) the CITIC securities company and the CICC company have higher efficiency.Finally, this paper gives some proposals for the improvement and enhancement of efficiency in Chinese securities companies.