Empirical Study And Estimation Of Efficiency In Chinese Commercial Banks

Chinese banks are facing competition from their foreign rivals as China implements the deregulation of foreign entry under WTO. Managerial efficiency for Chinese banks, has been the key factor to win in the competition. In order to improve our domestic banking efficiency, the level of banking efficiency and the degree of risks should be estimated and evaluated in a comprehensive way. So we the efficiency of our domestic banks is measured and tested in the paper using multiple models and methods from different aspects. Through the theory analysis and empirical results contrasts, the paper will be able to assist policy makers and managers of Chinese banks to carry on suitable policies and strategies so that we can achieve the goal of improving the overall domestic banking efficiency.There are two kinds of methods for measuring efficiency. One is frontier efficiency methods and another is non-frontier methods. The frontier efficiency estimation methods are usually used in the efficiency measurement of commercial banks because banking is an industry with multiple-inputs and multiple-outputs. Therefore, we reviewed the managing theory of commercial banking, the efficiency theory, the efficiency frontier theory and X-efficiency theory before our empirical studies. The essential efficiency frontier models are summarized. And the empirical estimation of the efficiency of Chinese banks has been taken with the same data set using parametric and non-parametric techniques from a variety of aspects based on lots of relevant papers from domestic and foreign scholars.The economic efficiency, scale efficiency and X-efficiency are analyzed from the macro and micro aspects. The panel data in our empirical study is taken from their...