Research On Factors Affecting The Efficiency Of China Listed Commercial Banks

With the growth of social and economic life, monetary funds as the important economic resources have become the lifeblood and important medium of the entire socio-economic life. Commercial banks are the enterprises that operate the monetary funds, whose operating efficiency is not only directly related to the optimal distribution of the resources of the whole society, but also impacts the healthy and rapid development of China's national economy. Through the empirical analysis of factors affecting the efficiency of China listed commercial banks, the research finds out the factors which needs to be improved and puts forward the relevant countermeasures, which have great theoretical and practical significance on upgrading the efficiency and competitiveness of China's banking industry and even the entire financial industry.In order to research on factors affecting the efficiency of China listed commercial banks, it should be based on the measurement of the efficiency values of commercial banks, the study completed in two steps. The first step is to measure the efficiency values of listed commercial banks. On the basis of analyzing the researches at home and abroad, this study selects Stochastic Frontier Approach(SFA), combines the characteristics of China listed commercial banks to define the input-output model variables, selects 11 China listed commercial banks as samples, and then measures the cost-effective values of these 11 commercial banks from 2001 to 2006. The second step is to analyze factors which affect the efficiency of listed commercial banks. Selects 7 indicators such as property rights, total assets, non-performing loans ratio, loan-to-deposit ratio, intermediate business income, expense-to-asset ratio and listed years from micro-factors affect efficiency of banks as model variables, cost-effective values from the first step as dependent variable, and then set up regression model to carry out the empirical analysis. Two-step study draws conclusions as follows. (1) With the advance of China's banking system reform, the cost-effectiveness of China listed commercial banks was on the rise year by year;(2) The average value of cost-effectiveness of State-owned commercial banks is significantly lower than joint-stock commercial banks average cost-effective, but the efficiency of state-owned commercial banks is growing faster than joint-stock commercial banks;(3)The efficiency of state-owned commercial banks demonstrates more serious polarization. The efficiency of China Construction Bank and Industrial and Commercial Bank of China are significantly higher than Bank of Communications and Bank of China;(4) The property structure is the main factor which affects efficiency of China listed commercial banks, which is consistent with the conclusions from scholars Zhang Jianhua and Guo Yan and supports"Property Rights Determinism"to some extent.On the basis of empirical analysis, this study comes up with countermeasures to enhance the efficiency of China listed commercial banks. First, speeding up the reform of bank property system and improving bank's governance structure. Second, effectively controlling the expansion of banks and promoting the deep development of banks. Third, reinforcing manage the non-performing loans and improving the quality of assets. Fourth, accelerating the development of intermediate business and expanding revenue channels.