Economies Of Scale Of Chinese Commercial Banks And Empirical Research

The banking has a merge upsurge, since the 1990s, as we all known, we can reduce the operating cost, spread risk, and achieve the scale economic by merging and acquisition. In 2001, China has joined the World Trade Organization (WTO), which signs our undertaking opening to the outside world has entered a new stage, and also means our banking face more competition. The study of banks' scale economics which has a great importance for Chinese banks getting a place in the international rat race.Firstly, this text analyzes scale economics by using 6 indicators—return on assets, profit per capita, cost on assets, cost per capita, branches and staff. Then, it builds a regression model based on Translog cost function and calculates scale elasticity of each bank. At last, it analyzed the influence factors by empirical analysis.We have drawn the following conclusion: Chinese banks has not scale economics, while the shareholding system commercial banks are better than the sated-owned banks. However, the stated-owned banks' scale economics are being improved, the shareholding banks' are being worse. Scale and property right are the most important factors in deciding banks' scale economics. And capital on assets has a different influence on the stated-owned banks and the shareholding banks.