Research On Efficiency And Affecting Factors Of China's Rural Credit Cooperatives

As the three dimensional rural issues are becoming more and more important during the social modernization process, the development of rural finance is becoming more and more urgent. As the main force of rural financial system, reform and development of rural credit cooperative(RCC)are concerned about by people all around the country. The development of rural credit cooperatives has been attached with much importance by the Chinese Communist Party and State Council and a series of reforms have been launched by the Central Government since 1996. After the separation from Agricultural Bank of China, RCC has stepped onto a road of independent operation and management. In August of 2000, approved by State Council, People's Bank of China and Jiangsu Provincial Government conducted the pilot reform of rural credit cooperatives(RCCs) throughout Jiangsu Province. In June of 2003, State Council launched Plan for Deepening Pilot Reform of Rural Credit Cooperatives to deepen the reform of RCC. In August of 2004, the scope of rural credit cooperatives pilots were enlarged to the rest 21 provinces except Xi Zang and Hai Nan.There are over ten years since the reform begun. There is no doubt that making research on the effect of the reform, the affecting factors of the effect , how to improve the effect of reform is of great practical significance. In this paper, the author selects efficiency to measure the effect of the reform of RCC , calculates the static efficiency with financial index analytical method and Data Envelopment Analysis(DEA) and the dynamic efficiency with Malmquist Index and analyzes the affecting factors with econometric method in order to provide some suggestions on the efficiency improving and risk prevention. The main contents are as follows:Chapter One: Introduction. In this chapter the author introduces research background, literature review, research content, research method, analysis framework, possible innovation, possible deficiency and so on. Chapter Two: Definition of efficiency of RCC and selection of research method. In this chapter the author first introduces the connotation of efficiency and then the connation of bank efficiency and then the definition of RCC efficiency. After comparing several research methods of efficiency, the author selects the financial index analytical method and Data Envelopment Analysis(DEA) to calculate the static efficiency and Malmquist index to calculate the dynamic efficiency of RCCs.Chapter Three: Empirical study on the efficiency of RCC. In this chapter the author chooses 42 RCCs in Jiangsu Province as the sample and uses the chosen financial index analytical method and DEA to calculate the static efficiency and dynamic efficiency from 1997 to 2005. The efficiencies before and after the reform are compared to judge the effect of the reform.Chapter Four: Analysis on the affecting factors of efficiency of RCC. In this chapter the cost efficiencies calculated in last chapter are chosen as the explanatory variables, affecting factors are chosen from four aspects: external macroeconomic environment, market structure, external factors of RCC and reform measures of RCC and the effect of these factors to efficiency of RCCs with different property rights is compared to provide scientific grounds to risk prevention. In the meantime, corporate governance is also taken into account and section regression on 2005 data is made to investigate the effect of corporate governance to efficiency.Chapter Five: Main conclusions and suggestions. In this chapter the author summarizes the conclusions and puts forward some suggestions.