The Empirical Research On Bank Efficiency Of Chian's City Commercial Banks

Six years after China's entrance in WTO, the finance market of China has already opened roundly. Large numbers of foreign capital banks swarm into China, new types of banks emerge continuously, and market competition become fierce increasingly. The finance industry of China will get a god-given opportunity but also have to face great challenges .The City Commercial Bank originally came from City Credit Community and now became a very important part of China' bank industry. Facing of the situation talked above, city commercial bank must seek for a new way for sustainable development and enhance its competitiveness.As we know, bank efficiency is a centralized embodiment of bank competitiveness, and also the most comprehensive achievement evaluation index as far. Bank efficiency is a relative value, which can be evaluated from macroscopic or microscopic aspect. From the macroscopic aspect, bank efficiency is the bank's contribution ratio to the growth of national economy; and from the microscopic aspect, bank efficiency refers to optimization of financial resource allocation finished by every commercial bank. In terms of the nature, bank efficiency is an effective allocation of the bank's resource, and is a weighting obtained on the basis of bank resource allocation and effective utilization degree of every resource. Bank efficiency can be measured from either the whole or a certain unit or part, it is a general term of bank's market competitiveness, input-output capability and sustainable development capability.This paper aims to study the efficiency of bank from the microscopic aspect .According to the attainability of data, this paper has carried out a search on efficiency of 30 typical sample banks, including 18 city commercial banks. Stochastic frontier analysis (SFA) method is applied to calculate the efficiency value of every bank firstly, and then calculate efficiency value of every kind of bank according to different types. Efficiency status and features of the city commercial bank can be founded out through comparative analysis of the calculated efficiency values. Since there are more differences among banks of different types, then causes of such differences among banks will be analyzed necessarily, namely, what kinds of factors affect the bank efficiency? This paper has analyzed the influencing factors upon efficiency of the city commercial bank with inefficiency effects .and finally propose advices for improvement of efficiency of the city commercial bank.