The Efficiency Analysis Of The Commercial Bank Of China

The commercial bank is the crucial node of one country's financial industry. The efficiency of banking industry directly influences the source allocative efficiency of the whole social system and the development of the social economic. During the past fifty years, the issue of bank efficiency has long been under attention of scholars from different countries. The standard study of commercial bank efficiency can be carried out from the following three angles: scale efficiency, scope efficiency and X efficiency. Early studies mainly focus on scale efficiency and scope efficiency, while recently the X efficiency has become the study focus of academic circles.After China's entrance into WTO, all the barriers and restrictions in financial industry will be removed gradually. Consequently, the opening-up of the entire financial circles has become a foregone conclusion and the competition between native banks and foreign banks will become fierce. The opening-up of the entire industry, the deepening of economic system reform and the rapid development of Chinese economic has provided Chinese banking with both challenge and opportunity. As a result, it has become an urgent and important issue to improve the efficiency of native banks.By employing stochastic frontier approach, the thesis makes an empirical study of Chinese banking's X efficiency from the angles of production frontier and cost frontier. Meanwhile, the thesis makes a comprehensive comparison between the orders of the two types of efficiency. Based on available data, the thesis builds a econometrics model in accordance with the current situation of domestic banking industry. Actually, the characteristic of the model is its emphasis on data factor. By ordering of the revenue efficiency and cost efficiency of each commercial bank, the thesis has also explored the variations of X efficiency of these banks after their going into the market and the difference between the variations.Finally, the thesis analyzes the primary factors that influence the efficiency of domestic commercial banks and concludes that the factors can be divided into three types ownership situation, risk management situation and human resource management situation. Based on above research, the thesis has studied the feasible approach and proposed concrete methods to improve the efficiency of commercial banks.