Efficiency Evaluation Of China Commercial Banks Considering Shared Inputs And Undesirable Outputs

Since China's reform and opening up,China's economy has shown a rapid growth,the healthy development of the banking industry is essential to the Chinese economy,which in turn the key to the healthy development of commercial banks.The use of scientific and effective methods to evaluate the efficiency of banks,which for management to develop programs and objectives is very critical for decision makers to provide convincing evidence.Therefore,this article has improved the existing evaluation methods to get more reasonable bank efficiency.First,this paper introduces the current research status about banks efficiency,and points out the existing problems in the current research methods.And then introduces the two-stage DEA and cross-efficiency research status,and points out that the disadvantages.For the shortcomings of discovery,this paper has made two improvements.On the one hand,the internal production structure of the system is optimized,taking into account the impact of shared inputs and undesired outputs on the system.On the other hand,in order to avoid the phenomenon that the traditional DEA weight is not unique,this paper introduces the cross efficiency on the basis of the original two-stage DEA model,and constructs a two-stage cross-efficiency DEA model considering shared inputs and undesired outputs.Next,this paper applies the proposed new method and traditional two-stage DEA model to the efficiency evaluation study of commercial banks in China,with 16 commercial banks in China as the research object,according to its 2006-2015 annual report for the study of the original data.This research is based on the specific condition of commercial bank operation,the bank operation process is divided into gathered money stage and earnings stage while considers shared inputs and the undesirable outputs at the same time.The calculator software we used in the researchis MATLAB R2014 a.The model we proposed is proved to be more available to evaluate the banks efficiency.This paper is not only beneficial for development of two-stage DEA model but also can help to measure commercial banks efficiency.Finally,we show the direction of system efficiency improvement for commercial banks.