TFP Of The Listed Commercial Banks In China

Since2008the U.S. subprime mortgage crisis, the stability of financial institutionshas been more and more concerned. At the same time, China’s commercial banks wasa very eye-catching performance. In2011, according to the British "Banker"magazine’s annual ranking, China’s banking industry occupied nearly one-third of theglobal banking profits. In its published rankings of global banking profits, ICBC,CCB and Bank of China occupied the top three. For this reason, research supportforce behind this performance will become meaningful.In this paper, the first time Hicks-Moorsteen TFP index has been used to measureChina’s listed commercial bank’s TFP change during2005-2011. This method canmeasure scale efficiency, scope efficiency, technological progress and technicalefficiency in a framework, so as to effectively solve the fragmentation problem (notsimultaneously measure the efficiency of scale, scope efficiency and cutting-edgeefficiency) and Incompleteness problem (the traditional method can’t break out ofscale efficiency and scope efficiency); the decomposition of technical progress,technical efficiency, scale efficiency and the residual mixed efficiency has a moreclear economic implications; this method can not only measure the static efficiencylevels, and can measure the dynamic productivity changes.Firstly, Bank of Ningbo is the "best practices" bank in most years, it shows that theTFP of commercial banks with the economic environment or geographical factorsextremely relevant; different property attributes commercial bank performancedifferent competitive advantages; Secondly, the dynamic productivity changesanalysis found Chinese listed commercial banks had an average0.65percent TFPdecline, further decomposition analysis found that slow technological progress is themain reason, the residual mixed efficiency (characterized by economies of scope)have an average annual increase of12.3%. Thirdly, based on efficiency-productivitycomparative analysis found that there is not a "universal bank"; the developments mayfall into the "getting stronger, getting weaker" dilemma. This study may evaluate theeffectiveness of Chinese commercial bank reform, recognize the international statusof China’s commercial banks, and start a new round of reform of commercial banks.