Bank Efficiency Analysis Based On The Dea Method In China

The reform in China's banking industry has aroused extensive attention since joining the World Trade Organization(WTO).From the joint-stock reform to the listing of state-owned banks,from the corporate governance reform to attract foreign investment of joint-stock banks,from the mergers to the acquisitions of the city banks,all the measures have made China's banking industry concerns.December 11,2006,according with WTO commitments,the full liberalization of China's financial sector had afforded more space for foreign banks to develop.China's commercial banks,faced with the changes of financial market and environment,the increase of competition,how to promote their commercialization operation and enhance their efficiency are the major challenges.This paper focuses on China's commercial banks' efficiency,selects related indicators of 32 commercial banks,and calculates the banking efficiency after the entry of WTO using financial data and DEA method.Firstly,this paper briefly addressed the main reforms in China's banking industry since 2001.Secondly,it examines the profitability of commercial banks in financial data way. Thirdly,it uses a non-parametric performance evaluation method-DEA,selects the variables and creates the models to measure the technique efficiency,pure technique efficiency,scale efficiency of chosen banks,furthermore,it analyses the efficiency difference in different ownerships and bank scales by the above efficiency results.Finally,according to the nature of the commercial banks,this paper points out the problems existing in our banking sector and related suggestions to promote the banking efficiency.In China,banking industry is the main body of financial sector,and the henlthy development of bankings is not only related to people's ordinary living,but also related to China's economic security and order.I hope that the suggestions presents in this paper may make efforts to promote China's commeicial banks' efficiency.