An Empirical Research On Bank Efficiency Of The Shanghai Commercial Bank Based On Three-stage DEA

With the development of global economy, finance has gradually become the core of modern economy. The development of the financial industry determines the development of national economic activity. As a modern financial system, banking plays an important part in the national macroeconomic regulation and resources allocation. Thus stable and efficient commercial banking system can guarantee the rapid economic growth. Since 2006, foreign-funded financial institutions and foreign Banks have already been at the same competition platform according to China's WTO accession commitments that China's banking system has eliminated the restrictions against foreign-funded institutions. Shanghai is China's most advanced region, and for many years, Shanghai has ranked the first in terms of GDP, which has offered enormous incentive to the banking development. Yet it must be pointed out that almost all Chinese commercial Banks and most of the foreign Banks are located in Shanghai. The Chinese Commercial Banks have to promote their own competitiveness in a comprehensive way in order to establish their momentum and ensure further achievements in a highly competitive financial environment. And efficiency is the embodiment of commercial Banks, so it is imperative that banking efficiency should be evaluated and analyzed, the shaping forces that may affect the efficiency of commercial banks should be identified, and banking reforms should be implemented.This paper adopted qualitative and quantitative methodologies with a combination of norms and empirical study based on theoretical and empirical analysis. In terms of content, this paper firstly introduces the basic theory of bank efficiency, including the concept of bank efficiency, the classification and measuring methods by comparing the advantages and disadvantages of traditional methods, then puts forward the latest foreign research methods--three-stage DEA method and finally elaborates the three-stage DEA method in detail. This paper has selected 14 house panel data of typical bank during the period from 2005 to 2009; the technical efficiency, the pure technical efficiency and the scale efficiency of the three types of banks have been calculated respectively followed by a ranking of the interval efficiency analysis, and finally the overall ranking of commercial bank efficiency movements has been analyzed; the author analyzes the movements of the Shanghai commercial bank efficiency. In the following part, qualitative analysis of the theoretical factors affecting the efficiency has been made, followed by the Tobit model, which aims to analyse five selected typical variables by empirical analysis. Finally, according to the analysis of the theoretical and empirical research, four related countermeasures and suggestions have been made to promote the efficiency of Shanghai commercial bank.