China's State-owned Commercial Banks Economies Of Scale

The scale of our state-owned commercial banks is enlarging constantly,but their efficiency is not so well. However that the large scale ofinstitution removing and reformation from 1999 has not solved theproblem that the scale efficiency of our state-owned commercial banks isnot so high. So we working over this issue has great practical andacademic meanings.On the basis of introducing the scale economy and bank scale economytheory, this paper simultaneously uses the index analysis and themeasurement model analysis. On one hand, through introducing someindexes, the paper contrastively analyzes the scale and the scale economyof the state-owned commercial bank and the joint-stock commercialbanks before the demonstration, and considers that they maybe scaeineffient; On the other hand, using the parameter approach andconsidering the state-owned commercial bank's income condition, thispaper establishes the index system using the income, the loans, theinvestment and securities as the outputs, and using the labor, the fixedasserts and credit funds as the inputs. It uses the translog cost function toestimate sale economy coefficient of the state-owned commercialbanks.The empirical result shows that, from 1994 to 2004, the coefficientof the bank scale economy of the state-owned commercial banksexperience the process of first going up then down, the state-ownedcommercial banks are in the phase of descending.The paper analyzes the reasons of the scale diseconomy from fiveaspects: the market structure; the fund scale & the personnel structure; thetechnical; the property right. And we give some suggestions onachievement of the scale economy of the state-owned commercial banksfrom the five respecters.