An Empirical Study On Chinese Commercial Banks M&A And Efficiency Gains

The global financial industry has lighted the fifth M&A fire, Foreign banks have increased size and occupied a large number of markets through M&A. China has been joined WTO, so foreign banks will share the equality right in the four years. But Chinese commercial banks has to solve many problems, such as entrancing the market is more difficult, bad assets is too more and the expenditure to construct banks net is too much. So Chinese banks have adopted M&A to deal with these conditions. But M&A is if a good way, it is a question we should study.This paper is to study the above questions. First, introduce the reasons and character of current banking M&A, then summarized the former studies of the three ways of M&A to efficiency gaining: size versus size economy, M&A versus banks efficiency, and M&A versus shareholders wealth. Then introduce the research approaches of M&A efficiency gaining, especially the approaches of M&A versus banks efficiency, such as parametric frontier approaches and non-parametric frontier approaches. In the following, through ROE model and DEA model to study the relations between size and efficiency, Finding: Middle size banks efficiency is higher, larger banks haven't scale economy, Small banks have low EM, and through directly analyzing M&A efficiency of four commercial banking M&A case in China, Finding: The past-merged efficiency of Shanghai Pudong Development bank has been improved, and others have been deduced, but after three years the efficiency increased little by little. Finally considering the conclusions of the empirical study put forward some policy suggestions and forward researching directions.