Research On Efficiency Of Chinese Listed Banks Based On CCA-DEA Model

The issue of efficiency is one of the core problems which economics deals with commercial banks also take efficiency as one of the goals of management. The efficiency of banking is not only the individual bank's performance but also the sign of its competence. The banking development depends on the efficiency in the long run. Improving the efficiency of commercial banks and controlling effectively of cost is the key to win in the banking. We should focus on improving efficiency, founding out the factors influencing efficiency, taking advantage of the function of the mechanism of these influence factors, and then proposing improvement measures and effective solutions.After a review of foreign cultural heritages, this paper carries on a statistic investigation to the related research local. It is found that the Data Envelopment Analysis might be the most suitable method. But, because DEA method is limited, the paper deals with original variable with canonical correlation analysis at first. To define inputs and outputs, this paper suggests two methods based on two characters of commercial banks, general and earning considering three familiar methods in home and international. Then, this paper estimates efficiency of the fourteen listed banks in China in 2006-2007, influencing factors are estimated either. We review technical efficiency with CCA-DEA. Then the technical efficiency is decomposed into pure technical efficiency and scale efficiency. The estimation result shows that the efficiency of most of the listed banks is inefficient, and the banking inefficiency originates from pure technical inefficiency and scale inefficiency.Furthermore, this paper makes a Tobit regression where the CCA-DEA technical efficiency are referred as dependent variable, some factors influencing bank's efficiency are viewed as independent variables. The results show that badness loan proportion and the ratio of loan to deposit have negative correlation with banking efficiency, while per operating expenses and listed time have positive correlation coefficient. Based on the above results, some suggestions are made in this paper to improve the banking efficiency. Through the implementation of non-performing assets securitization and set up credit risk management mechanism in order to reduce the risk as the core to reduce non-performing loan ratio of banks. Through mergers and acquisitions or merge branches, such as the reorganization of different ways to improve the efficiency of the corresponding scale of banks, but also increase the financial product innovation, attention to personnel training, improve staff quality, etc.