The Study Of Commerical Bank’s Efficiency In China Based On Network DEA Model

In recent years the Chinese banking system has made enormous strides in reform and deregulation. As the major component of Chinese financial industry, commercial banks play an import role in economic development. The level of its efficiency becomes an key factor to our national economy. An effective evaluation of the efficiency of commercial banks, and digging out the causes of the inefficiency, which can offer suggestions for commercial banks to improve its efficiency.In the application of commercial bank’s efficiency evaluation, it mainly contains traditional DEA method, DEA-Malmquist method, super efficiency, etc. However, these methods are only from the perspective of single system to evaluate commercial banks’s efficiency, not taking subsystem into account, so its evaluation is relatively rough, and can not identify the internal causes for inefficiency commercial banks. This paper studies the theory of commercial bank management, dividing the operating process of Chine commercial banks into three sub-processes, namely capital organization, capital operation and capital profit with the operating situation of Chinese commercial banks under consideration. Then selecting the input and output indicators of commercial banks based on the principles of the construction of index system. And on this basis, this paper respectively constructing network DEA model under the assumption of CRS and VRS. Then we comprehensive evaluate the efficiency of Chinese commercial Banks from 2005 to 2012. The results show that the overall technical efficiency of Chinese commercial banks is not high, from an overall perspective, the joint-stock commercial banks and city commercial bank average technical efficiency is higher than state-owned commercial banks, and joint-stock commercial banks technical efficiency invalid mainly caused by pure technical is invalid, the state-owned commercial banks and city commercial bank technical efficiency invalid is mainly composed of scale is invalid. In terms of the stages, from the perspective of capital organization, the technical efficiency of joint-stock Banks and city commercial banks are higher than state-owned commercial Banks, the technical efficiency of state-owned commercial Banks is minimum; from the perspective of capital operation, the technical efficiency of state-owned commercial banks and city commercial banks were higher than joint-stock commercial banks; from the perspective of capital profit, these three types of commercial bank’s ability of profitability are almost. same; Joint-stock commercial bank technical efficiency is invalid at both three stages is primarily caused by pure technical is invalid, the state-owned commercial banks at both three stages of technology is invalid is primarily caused by scale is invalid. The technical inefficiency of capital organization in city commercial banks is mainly caused by scale is invalid, the technical inefficiency of capital operation in city commercial banks is mainly caused by pure technical efficiency is invalid, the technical inefficiency of capital profit in city commercial banks is mainly caused by pure technical efficiency and scale is invalid. From the perspective of system, the level of technical efficiency of capital organization in commercial bank decides the level of its overall technical efficiency. According to the results of the study, this paper puts forward the corresponding policy recommendations.