The Impact Of Social Environment Factors On Commercial Banks' Efficiency In China

The bank efficiency is an important indicator to determine the competitive advantage of banks.The significant influence of social environment factors acting on bank efficiency should not be neglected any more.Therefore,this paper researches the impact of social environmental factors on China's commercial banks' efficiency innovatively from the perspective of institutional environment and market environment.Furthermore,we investigate the influence of institutional reform and state-owned shareholding on the above relationships.This paper extends Stochastic Frontier Approach to measure cost efficiency and profit efficiency and extends SBM Data Envelopment Model to measure technical efficiency,pure technical efficiency and scale efficiency.We find that the overall trend of cost efficiency become smooth when considering risk-taking and the operation efficiency is improved and the trend of efficiency is consistent with macroeconomic operation when both the desirable factors of inputs and the undesirable factors of outputs are taken into account in the SBM model.This paper makes an empirical analysis based on the unbalanced panel data of China's 111 commercial banks from 2003~2014,the results are as follow:(1)Institutional environment factors have a robust and remarkable effect on bank efficiency,optimizing the institutional environment willpromote bank efficiency.(2)Market environment factorshave a significant effecton bank efficiency,Enhancing market power will produce positiveimpact,raising market concentration degree and foreign bank entry will lead to bank efficiency decrease.(3)The overall effect of social environmental factors shows that institutional environment has more significant impact on bank efficiency,the impact of market environment factors on bank efficiency is volatile,while only market forces always play a positive role.(4)China's anti-corruption work is carried forward actively,which results in greater active impact on the relationship between institutional factors and cost efficiency,profit efficiency,but has no significant effect on the relationship between market factors and bank efficiency(5)Lower stated-owned shareholdings of bank,social environment factors behave higher significant impact on its efficiency.Reducing the stated-owned shareholdings will do a favor to promote the bank operation from the perspective of institution and market.