An Investigation About Cost Efficiency And Influence Factors Of Chinese Commercial Banks

In2001, China formally joined the WTO. From then on，Chinese banking industry hasentered a new stage of development and reform, and it also said that a comprehensive era ofcompetition is upcoming. Between2001and2006，the five-year grace period, Chinesebanking industry seized this rare good time and changed the impression of the Chinesebanking industry in the world through various efforts, and Before and after2006, manyBanks have listed successfully. After Listing, the financing channels of major banks are muchwider and the asset structures are also optimized into a reform. And Chinese CommercialBank is playing a more and more important role in the development of the national economyafter the accession to the WTO.According to the data of Chinese commercial banks after the accession to the WTO(2001-2011), by using the most widely parameter method，stochastic frontier analysis（SFA），we estimate the value of cost efficiency of Chinese13listed banks in the listed. Further,according to the commercial banks operating characteristics, we discuss the main endogenousfactors affecting the cost efficiency of China’s banking industry.By contrast the characteristics of the literature and the used data of bank，we constructthe frontier cost analysis model with time squared term to estimate the cost efficiency of13listed banks. The model estimates the final draw: between the years of2001-2011, the averageefficiency of Chinese commercial banks was generally rising trend line on the whole, thecommercial banks’ cost efficiency tend to be consistent; the joint-stock banks has the higheraverage efficiency value relative to the state-owned banks, relatively the state-owned bankshas a faster pace of development of cost efficiency in the latter sample period. Especially after2006, the Industrial and Commercial Bank’s and the China Construction Bank’s efficiencyvalue gradually occupy the forefront of efficiency values sorted. The China Merchants Bankhas the best average cost efficiency of all the commercial Banks.After estimating the results of the banks’ cost efficiency, according to the status quo ofChina’s commercial banks, we select the size of the bank, fixed assets ratio, type of ownership,capital adequacy ratio, non-performing loan ratio, the proportion of non-interest income andtechnological progress rate et al.7factors that may affect the banks’ cost efficiency in theempirical analysis, found by calculating: bank size, ownership structure, capital adequacy ratio and non-performing loan rate of four indicators have a significant impact on the costefficiency of the commercial banks. The size of the bank and the capital adequacy ratio of thecost-efficiency of commercial banks has a significant positive effect, and the size of the bankis positive impact on the cost-effectiveness of the strongest commercial banks; structure ofproperty rights and the NPL ratio from the cost efficiency of banks significantly reaction, thenegative effects of the cost-efficiency of the structure of property rights continues to occupythe first place, the nature of the commercial banks is to determine the banks’ cost efficiency isan important factor.