Technical Efficiency Of Securities Companies Of China Based On The Analysis Of Three-stage DEA Model

With the gradual opening of China's financial markets in recent years, the competitive environment of China's financial industry has undergone tremendous changes, especially after the enormous hit of 2008 U.S. subprime mortgage crisis on the global financial industry, how to improve the competitiveness of China's capital market and can Play its due role in the entire financial and economic system is particularly important. So securities companies, as the most important capital market intermediaries, the level of their competitiveness will directly affect the healthy development of China's capital market, thus affecting the normal operation of the entire financial system and even the speed and quality of the development of the entire national economic.Operational efficiency of financial institutions domestic and foreign is already one of the hot fields of financial research; operational efficiency is also the important manifestation of the core competitiveness of securities companies. This paper conducted in-depth analysis on technical efficiency of integrated securities firms with data envelopment analysis (DEA) Theory, in order to find the operating efficiency shortcomings of the Chinese securities firms, and strive to give targeted recommendations to improve the efficiency, also provide certain information for healthy and rapid development of our securities companies.The paper first expounds the background of the topic choice. Then retrospect and give the summary of status of the securities industry, the definition of efficiency and the DEA's theory and models. For the three-stage DEA model the paper illustrates the research method selection process. In the empirical research part, the paper evaluates technical efficiency of 43 comprehensive securities companies of China in 2008 and 2009 with DEA three-stage model proposed by Fried et al(2002). The results demonstrate that the technical efficiencies are really affected by environments, after exclusion the environment variables in the homogeneous operating environment the level of technical efficiency significantly decreased and efficiency loss comes mainly from the scale invalid. The technological innovation of China's securities industry is currently in the increasing stage of returns to scale. Overall technical inefficiency is mainly due to scale inefficiencies of technological innovation, so the government should raise the scale level of technological innovation to increase the efficiency of technological innovation. Finally, as the problems identified, the paper gives some policy recommendations to securities companies. To improve the financial service innovation, expand its market share, introduction of strategic investors, implementation of merger and step up to market is an important way to enhance the efficiency of securities firms.