A Comparative Analysis Of Cost Efficiency Of Sino - US Commercial Banks Based On SFA

Banks has play a decisive role in the development of economy, so the research on the efficiency of commercial banks has important significance. Commercial banks efficiency reflects not only the ability to use commercial bank resources, but also can measure the whole operation management status and disadvantages, through an analysis of the efficiency of commercial banks to reflect the operational performance of commercial banks is an effective way. This article through to compare different cost efficiency level of China and America commercial banks, to make the appraisal to the operation and management of commercial banks in both countries; on the other hand, we can further study the factors affecting the domestic and foreign commercial bank cost efficiency differences, which can use for reference the successful experience of other national commercial bank, and provide the suggestion to improve the overall level of cost efficiency of Chinese commercial banks.Through literature reading and summarizing, this paper choose the stochastic frontier analysis method (SFA92 model) to measure the cost efficiency of commercial banks in Chinese and America during 2006 to 2013. Through the comparison of cost efficiency value over the years, found Chinese four big state-owned commercial bank cost efficiency is the lowest, below than Chinese other joint-stock commercial banks, but also significantly lower than most of America commercial banks. From the point of view the trend of cost efficiency. commercial banks China cost efficiency in the sample period maintained a gradually rising state, and USA commercial bank cost efficiency experienced a significant drop process in 2007 and 2008, it began to rise from 2009.Based on the reference of existing research, the factors affecting the cost efficiency of commercial banks are divided into three categories:macro level, industry level, the bank level, from the three aspects were selected to analyze the factors influence on the cost efficiency. Through the panel data regression analysis, the main differences between the factors of Chinese and America commercial banks cost efficiency are the factors of macro and industry level. Factors in the bank’s own level are almost same except the capital adequacy ratio and non-interest income, the causes of this situation lies in the different institution of the two countries banking system.