The Empirical Study On The Efficiency Of Chinese Commercial Banks

Banking is at the core position of the modern financial industry,the total assets of commercial banks is far greater than the assets of other financial institutions. The economy of the current world is fast forward,and the relative stability of the financial system is very important to a country’s economic development.Specific to China, the world’s second largest economy,the effective operation and steady development of the commercial bank, can make these banks to play a pivotal role on the capital financing,it can also provide an inexhaustible power for the vigorous development of Chinese financial market and the steady growth of the national economy.For this reason,It has a very practical significance to study the Chinese commercial banks’ efficiency issue.The efficiency of commercial banks refers to the capacity of banks to transfer the investment cost to actual profits,it is an important index to evaluate the operating performance of the commercial banks.The efficiency of commercial banks is one of the popular research topic among the financial institutions and academic research institutions.However,most of the literature has a single empirical model,the study results are relatively one-sided,the input and output indicators have been determined inconsistency and the sample data are too old to research.Therefore, this article selects the latest sample data from18commercial banks in china from2009-2013for analysis,using DEA and SFA method respectively to construct the empirical model, the input and output indicators have been determined in a much more unified way.In order to have a relatively comprehensive and pertinent evaluation on the Chinese commercial banks’ efficiency.The empirical research contents and main methods of this article is on the basis of the basic theory of commercial bank’ efficiency,the non-parametric method and parametric method were used respectively to measure the18samples of the commercial banks of China during2009-2013’s efficiency,mainly includes the pure technical efficiency,scale efficiency and cost efficiency.Among them, the non-parametric method research mainly uses the data envelopment analysis (DEA), defining the input index for the net value of fixed assets, interest expenses, non-interest, define the output indicators for the loan balance, interest income and non-interest income, is applied to the analysis of pure technical efficiency and scale efficiency;Parameter analysis mainly uses the stochastic frontier analysis (SFA), by defining the input index average price for loan-able funds and operating spend average prices, output indicators for the loan balance, interest income and non-interest income,The trans-log cost function is used to determine the final calculation model, used to measure the cost efficiency.In this paper, the main conclusions are:(1) China’s commercial Banks generally have the problem of insufficient scale efficiency, among them, the most large state-owned commercial Banks and joint-stock commercial Banks are located in regional scale diminishing returns area, while the city commercial Banks located in non-increasing return of scale area;(2) In terms of pure technical efficiency, the optimal one is joint-stock Banks,the second one is city commercial Banks, state-owned commercial Banks is relatively low;(3) China’s commercial Banks exist cost inefficiency, and inefficiency is caused by random factors’ influence;(4) Chinese commercial bank’s cost efficiency value’s overall level is higher,and the cost efficiency has stability convergence. After the empirical conclusions, the author put forward5points in line with the actual situation of policy recommendations, including the large state-owned commercial banks to improve innovation ability and control scale moderately;Most of the joint-stock commercial banks to keep technological advantages, scientific and moderate development;City commercial banks "going out";All the commercial Banks in keeping the advantage of cost control based on the enhanced random factors of early warning and processing ability, etc. At the end of the article, the author put forward in this paper the deficiency, including sample data need to be further expansion, considering the influence of non-performing loans on output items, etc., and prospect for further research are put forward.