The Research Of City Commercial Bank’s Scale Economy

City commercial Banks are born in urban credit cooperatives.after nearly20years’reform and development, their assets rapidly increase, business scope gradually expand. They have become one of the most vitality and potential in our country commercial bank system. But we are supposed to take into account the efficiency problem, namely, how to keep a balance between the scale and efficiency. Because the city commercial banks are local financial institution, we not only consider their own strength, but also pay attention to the demand of local development. What’s more, the current regional economy is not only limited in the administrative division, the wider economic circle has been incorporated into the overall strategy development. Therefore, we come to the perspective of economic circle to compare the scale economy. It’s beneficial for City Commercial Banks to looking for accurate positioning and differentiating the competitive landscape.We choose the Yangtze River Delta, Bohai Rim, the pan-pearl River Delta, which are the leading to economic and financial development, as the research subject. First, we compare the three economic circles’ development pattern, the distribution of city commercial banks, the central city’s characteristic of expansion. Then using panel data and adopting the logistic cost function, we select mediation method, extensive-mediation method, dual method and modern method to establish fixed effects model, which conclude44banks of276sample points in2006-2013. We try to discuss three aspects, that is, the overall development, the change trend and the central city efficiency of three economic circles’scale economy. At the same time, we evaluate the scale efficiency and the risk when considering the cross-regional expansion.The main conclusions are:First, scale expansion does not mean scale efficiency, small city firm show greater volatility in scale economy values. Second, the city commercial bank’s efficiency scale of the three economic circle is improving the overall, namely, the bank of Yangtze River Delta’s economic value gradually decreased, bohai Rim has improved relatively flat, pan-pearl River Delta has the largest change. Third, the scale efficiency show consistent with urban gradient features, which is in the first gradient city, banks were higher than in the second gradient center city. Fourth, the efficiency the cross-regional operation has obvious class differences. The economy values of banks increase in turn, operating in nationwide, economy circle, in the province. But the banks of operate in the province is more advantageous to risk control. Therefore, we suggest that city commercial banks are supposed to foothold in the economic circle first. When conditions are ripe, they can appropriate expand to the outside economic circle and the center city. In this way, we can improve the overall efficiency trough business structure adjustment and improve corporate governance.