Empirical Study Of Chinese Commercial Banks’ Efficiency

The important standard of achievement of financial institution is Efficiency.Finacialinstitution’s resourse using effects and oral operating situation is measured in terms ofefficiency, so analysis of efficiency is a kind of effective method. Efficiency is a pivotalindex of development situation of Chinese Commercial Banks.It is important for ChineseCommercial Banks to measure objective and exact efficiency and find influencing factors.In present,Chinese and foreign scholars use the DEA (Data Envelop Analysis)model tomeasure the efficiency. DEA is a linear programming method which is used to evaluatethe efficiency that a decision-making unit(DMU) is compared with other units.TraditionalDEA includes the external environment factors and statistical noise.This method is limited.This paper uses three-stage DEA method to study the relative efficiency of ChineseCommercial Banks. In the first stage,the traditional efficiencies are calculated depended onthe original inputs and outputs,and input slacks are evaluated.And in the second stage,theimpacts of the external environment and statistic noise are removed by the SFA(StochasticFrontier Analysis) model,and inputs are adjusted.At last,the third stage efficiencies arecalculated depended on the result of SFA model.Through the three-stage DEA method,thehomogeneity of the commercial banks is enhanced,and the efficiencies evaluated by thethree-stage DEA model are more objective and accurate.The empirical results show that the apparement diffierences exist between the first andthe third efficiency after removing the impacts of environment factors and statisticnoise,through the adjustment of SFA model.In the three-stage method,the technicalefficiency and the scale efficiency measured by the third stage DEA method is lower thanthe efficiencies measured by the first stage,but the pure technical efficiency is higher thanthe efficiency measured by the first stage DEA method.So SFA model is necessery.Throughthe process adjustment, coefficient of environment factors is found,and the third stage’sefficiency value already rejected the external environment factors and statistic noise’sinfluence,and can accurately represent each commercial bank’s management and operationefficiency.The efficiency value also can help the relative authorities of the commercialbanks to make the right judgement and implementation of business strategies.