The Research On Technical Efficiency Of Chinese Rural Commercial Bank

Through more than ten years reform and development, the Rural CommercialBank has become an important part of Chinese modern rural financial system, and isthe main mode and ultimate goal of the reform of our rural financial system. In orderto promote competitiveness and sustainable development capacity of the RuralCommercial Bank and give policy recommendations to the deepening reform of ruralfinancial system, doing research and analysis on the Technical Efficiency of the RuralCommercial Bank and the factors influence the technical efficiency has importanttheoretical and realistic meaning.This paper researches the Technical Efficiency of the Rural Commercial Banksthrough comparative analysis and empirical analysis: firstly, we measure the technicalefficiency of the Rural Commercial Banks, State-owned Commercial Banks andJoint-stock Commercial Banks based on the DEA method, and compete the first onewith the latter two as a benchmark, and the result indicates that Rural CommercialBanks are more efficient than State-owned Commercial Banks but less efficient thanJoint-stock Commercial Banks. Secondly, based on fixed effects panel model, weapply empirical test to analysis potential factors for the technical efficiency of theRural Commercial Banks. And the result indicates that both external factors andinternal factors may influence the technical efficiency. Specifically, L-D ratioindicating asset allocation capabilities, ratio of non-interest income indicatinginnovation and M2-GDP ratio reflecting the degree of financial deepening contributeto the degree of efficiency; whilst the GDP growth rate as a representative ofmacroeconomic environment does not significantly affect efficiency level; however,the following factors may have negative effect on efficiency: ratio of non-performingloan standing for assets quality, operating expense ratio, equity capital ratio and assetsize as proxies for operations management capabilities.