Eiffciency Evaluation Of Chinese Commercial Banks Based On DEA Method

Commercial Banks are important financing institutions in financial markets. Since thebreak out of international financial crisis, the importance of protecting Commercial Banksfrom risks is increasingly obvious. Efficiency is the concentrated expression ofcomprehensive competitiveness of banks and the core of the bank management. Under thebackground that the emerging joint-stock banks continue to appear and foreign banks run intoChina’s financial market, evaluating the efficiency of Commercial Banks may provide thefundamental theories for relevant bank supervision policies, helping to maintain the stabilityof financial system development, improve the competitiveness of Chinese Commercial Banks,promote economic growth.Data envelopment analysis (DEA) is a classic efficiency evaluation method. The CCRand BCC models can only compare the relative efficiency of each bank for a single year, butnot compare longitudinal changes for the efficiency of a single bank on the time sequence. Soreferring to domestic and overseas results, and focusing on the existing researchesinsufficiency, from two angles of the static and dynamic, this paper evaluates the efficiency ofthe11joint-stock banks and four state-owned banks in China by using data envelopmentanalysis method. This paper not only uses the classical BCC, CCR and Super-efficiencymodel to analyze commercial bank’s technical efficiency and decompositions, but also usesMalmquist index method to study the changes of commercial banks for five years. Accordingto the specific empirical results, this paper puts forward corresponding measures to improveChina’s Commercial Banks efficiency.The innovations of this article are as following:1. Factors of human material andfinancial resources and quality are fully considered when choosing input and output index inorder to get more convincing empirical results.2. Data period is the time of the outbreak ofthe international financial crisis in2007to2011and sample banks are fifteen commercialbanks at the forefront for the2010asset scale. Sample selection for above aspects hasreference significance for the future business adjustment management direction.