Evaluation Of China's Commercial Banks' Efficiency Based On Two-stage DEA Method And Analysis Of Influencing Factors

The bank industry is a key element of the financial industry,playing an indispensable role in the financial industry.Efficient bank sectors can optimize the allocation of resources.So,it is very important to assess bank performance.At present,DEA is often applied to assess bank performance.However,there are still some deficiencies in the existing research: First,most studies don't consider the undesired outputs in the bank's operation process.Second,existing studies often ignore heterogeneity among banks.Third,current DEA models cannot deconstruct the sources of improvement for invalid units.In order to solve these problems,this paper proposes an improved DEA method.This method combines the two-stage DEA model with the directional distance function,considering undesirable outputs and the heterogeneity of bank production technology.Therefore,the method can effectively improve the accuracy of the evaluation results.In addition,this paper decomposes efficiency inefficiencies into technical inefficiencies(TP)and management inefficiencies(MG).In the empirical research part,this paper uses the improved method to evaluate the efficiencies of 50 Chinese commercial banks.Based on the ownership structure,these 50 banks are divided into 3 groups: state-owned commercial banks,joint-stock banks and city commercial banks.The empirical results show that:(1)the efficiency of Chinese banks is still relatively low.(2)The deposit efficiency is lower than the loan efficiency.(3)Whether under the group frontier or the meta frontier,state-owned banks have the highest efficiency,followed by joint-stock commercial banks city commercial banks.In order to study the specific reasons that affect the bank efficiency,this paper uses the Tobit model to analyze the factors affecting the bank's efficiency.The empirical results show that: 1)the efficiency of bank deposits and loans is affected by both the bank size and CAR,and both have a positive correlation with efficiency;2)there is a positive correlation between NPLR and deposit efficiency;3)The LDR and ROTA are conducive to the improvement of loan efficiency,while public listing(L)is not conducive to improvement of efficiency;4)Adding macro factors and industry factors,the impact of the above influencing factors on the bank's efficiency has not changed significantly.Besides,HHI index has a positive impact on the efficiency of the two stages.