Chinese Commercial Banks’ Efficiency And Its Influencing Factors From The Perspective Of Undesirable Output

The efficiency evaluation has been the hot issue of the research problems in theeconomics and management researches. The operating environment of chinese banking’is changing, following the transformation of economic growth pattern，the deepening ofthe structural adjustment，the constant acceleration of financial system reform and thesteady promotion of the interest rate marketization. Traditional development patternrelying on capital consumption is unsustainable. It’s the very time for commercial banksto set out to transform strategic. Banking efficiency is the comprehensive embodimentabout the ability of internal management and resource allocation and its marketcompetitiveness. Improving the bank’s operational efficiency is helpful to promote thestrategy transformation and its sustainable development. Therefore, accurate and realevaluation of the current efficiency of commercial banks in china and analyzing thereasons of inefficient in the Banks are help to promote china’s commercial banks’operating performance, to optimize the allocation of the financial resources, and topromote the mode transformation of economic growth.In this paper, after a review of the related literature at home and abroad, we select25the state-owned, joint-stock and city commercial Banks as the research sample, thebusiness situation of the period2006-2011as the observations. Considering theunexpected output of commercial bank, we choose the deposit as the link variablebetween years and use modified dynamic DEA to estimate the every year’s technologyefficiency, pure technology efficiency and scale efficiency of Banks. It uses the dynamicDEA model to reveal the efficiency value of commercial Banks as a whole, during6years, and tries to measure the changing and causing of the efficiency. So itcomprehensively describes the dynamic evolution of efficiency of domestic commercialBanks. Then, we use ‘technical efficiency’ as the dependent variable on the basis ofendogenous factors of commercial Banks, and choose the factors which may influence theefficiency of Banks as the independent variables to build the model and do regressionanalysis, so we can get to know how these factors affect the efficiency of commercialbanks separately. The research shows that:(1) Pure technical efficiency of Chinese commercial banking industry is at a highlevel, but the overall efficiency of banking industry has not reached the optimal efficiency frontier because of the universal existence of scale inefficiency and much output of badloan.(2) For the State-owned, joint-stock commercial banks and city commercial banks,their disparities in the pure technical efficiency are narrowing, but the differences intechnical efficiency and scale efficiency are more obvious. In especial the parts of citycommercial banks are catching up to state-owned and joint-stock commercial banks in thetechnical efficiency and pure technical efficiency.(3) From the factors which affect the efficiency of commercial banks, financial crisishas a significantly negative correlation with the technical efficiency. And the per capitaassets, capital adequacy ratio, return on net assets and equity structure has a positiveeffect on technical efficiency.The last, we raise our policy advises from the perspective of optimizing the scale ofoperation, decreasing the rate of non-performing loans, deepening the stock systemreform and consolidating the financial innovations on the basis of the empirical researchconclusion.