Study On Economies Of Scale And Economies Of Scope In Chinese Banking

China has joined the World Trade Organization formally, which signs our undertaking opening to the outside world has enter a new stage. Finance open made the capital controls system of China broke progressively while the finance was integrated. The foreign banks enter which will make the competition of the local banking more vigorous gradually, how to improve the competitiveness of banking becomes the focus that we pay close attention to. Efficiency is the concentrated reflection of banking's competitiveness, so improve the efficiency of banking is the base of taking precaution against financial risks, promoting banking's sustainable development. The scale of economics has reflected the relation between scale and cost, having important influence on business efficiency and cost efficiency, thus play an important role on the efficiency of the bank.This text started from general principle of the scale economics, explained the reason why the scale economics of commercial banks formed and influence factors, then analyze the cost function of the banking scale economy and the scope economy, and how to measure the banking scale economy and the scope economy.Then, this paper estimates efficiency of the major banks in China in 1996-2005, this text make use of TCF and GTCF and the econometrics to research the economy of scale and scope. I introduce a variable of technology in cost function. Then study the efficiency of china's banking from the asset size, ownership structure and other aspects of technological progress.Through comparing the state commercial banks with the commercial bank of the shareholding system and compare the state commercial banks, the commercial bank of shareholding system with itself, we have drawn the following conclusion: the characteristic of the commercial bank of our country is the larger ones are not strong and the strong ones are not big, which embodied in it is uneconomical in the four major state-owned commercial banks of our country; shareholding commercial banks are in the scale of economy production area, but have not reached the best scale. Meanwhile the competition of the whole banking is in low-levelly.Direct against the characteristic of the economic scale of the commercial bank of our country, propose the following policy recommendations, in order to improve its current situation from aspects of microcosmic and macroscopic: Efficiency of state-owned commercial banks can't be improved except that reform on their public-owned ownership structure and network is carried on. Also the competitive the technical level and the quality of the labor and asset structure should be improved. Opening of Chinese banking market should be speeded up when the financial supervision is enforced to keep the banking system stable etc.