The Study On Thex X-Efficiency Of China’s Trust Company

Efficiency is the concentrated expression of the competitiveness of the trust industry, improve the efficiency of the trust industry is to prevent financial risk,and promote the sustainable development of the trust. therefore,it’s a priority to explore ways to improve the efficiency of china’s trust companies and take measures by evaluating of the Efficiency of our trust companies.This paper empirically analyzes the x-efficiency of34trust companies of china in the year from2008to2010. To a true reflection of the random error term X-efficiency of the trust industry, this study used the parameter method. Trust business in China in recent years the business developed rapidly, especially after the introduction of two new regulations in2007, with the improvement in the company’s internal governance structure and business norms, these assumptions are not able to truly reflect the objective reality.Therefore selected in this paper the stochastic frontier approach (SFA) to do empirical studies of the X-efficiency of the trust industry. In this paper, the intermediation approach to define the input and output variables of the trust company. The output of the intermediary funds of all the trust companies, the business income of the trust company can be used instead, input prices for labor and capital.The empirical results show that:(1)、China Trust Industry X-efficiency of individual differences, trust companies, regardless of cost-efficiency or profit efficiency levels are in a large range of fluctuation.(2)、the empirical data for three years, the trust company cost efficiency basically showed a decreasing trend year by year, and profit efficiency showed an increasing trend. Trust industry as a whole from2008to2010, three years, the average cost efficiency0.7489,0.7314,0.7310, reflecting a higher level of cost efficiency, which can be speculated that the trust industry as a whole more adequate competition, trust company efforts to control the cost of upgrading their competitiveness. The three-year average profit efficiency of the industry as a whole were0.6771,0.8395,0.9292, profit efficiency is rising faster performance stabilized for the trust industry after the sixth rectifying gradually clear function positioning, business model, profitability is greatly enhanced.(3)、the trust company’s cost efficiency and profit efficiency does not necessarily linked to cost efficiencies and higher profit efficiency may be lower, and vice versa. The trust while controlling costs, enhance profitability.