Efficiency Comparison Of State-owned Banks And Shareholding Banks

Efficiency is the centralized reflection of the competition ability of commercialbanks,which is the key element to defend financial risk and open up the bankingindustry. This dissertation synthetically analyzes the efficiency of Chinesestate-owned commercial banks and shareholding banks during 1997-2002 from twoaspects: static efficiency and dynamic efficiency. At the same time we put emphasison the efficiency comparison between the state-owned commercial banks and theshareholding commercial banks.This dissertation firstly investigates the static efficiency of commercial banks,employing Data Envelopment Analysis (DEA) approach to estimate the technicalefficiency of Chinese state-owned commercial banks and shareholding banks on thebase of financial analysis. And then we decompose it into pure technical efficiencyand scale efficiency. We find that the efficiency of the whole banks keeps descendingfrom 1997-2002, while the efficiency of shareholding banks is higher than thestated-owned banks by about 5~6 percent and the volatility is also lower than thelatter according to the average estimator of efficiency.Then this dissertation introduces a DEA-based Malmquist index to evaluate thedynamic efficiency of Chinese commercial banks. Decomposing the Malmquist index,we can explore more explicitly the change of bank's productivity between thecatching-up effect and the frontier-shift effect. It is shown that the efficiency ascendsfrom 1997~2002 except 1998~1999. And the increase of efficiency of state-ownedcommercial banks is higher than that of shareholding banks while more volatile.In the last section, we analyze the macroeconomic determinants of the efficiency ofcommercial banks, as well as microeconomic determinants by further conductingregression analysis with panel data. And hence, we could explain the causes for thedifference of efficiency between two types of banks.