The Influence Of Local Government Intervention On The Use Efficiency Of Funds In City Commercial Banks

The use efficiency of bank funds not only affects the sustainable development of banks themselves,but also the important determinants of capital efficiency of the whole financial system.It is an important problem worth studying.The existing literatures mainly study the efficiency of bank funds from the aspects of bank internal factors and external macroeconomic environment,and not much attention is paid to the effect of government actions on the efficiency of bank funds.Because of historical reasons,city commercial banks and local governments are closely linked,the local government through direct or indirect channels affect the operation of city commercial banks.So,local government intervention on the city commercial banks have significant effect on the use of funds? If so,then in the end is to improve the efficiency of city commercial banks or reduce the efficiency of the city's capital to use it? In addition,the local government intervention on the characteristics of the city with different characteristics of the efficiency of the use of funds have different effects? On these issues,the existing research literature has not given due attention;this article is committed to answering these questions,I hope the reform of urban commercial banks will have some reference value.In terms of theoretical analysis,this paper,based on the historical origins of local governments and city commercial banks,uses principal-agent theory,development theory and political theory to analyze the possible impact of local government intervention on the efficiency of urban commercial banks' mechanism.In the empirical study,this paper first uses the generalized three-stage DEA model to calculate the capital utilization efficiency of city commercial banks,synthesizes the local government intervention index by principal component analysis,and then uses the panel data model to analyze the effect of government intervention on capital utilization efficiency.The results show that:(1)In controlling the macroeconomic variables,industry structure variables and bank's own characteristic variables which may affect the efficiency of bank's capital use,there is a significant negative correlation between the efficiency of capital utilization of city commercial banks and government intervention,The stronger the city commercial banks to use the lower the efficiency of funds,on the contrary,the higher the efficiency of the use of funds.(2)The influence of government intervention on different city commercial banks is different.Specifically,the effect of government intervention on the efficiency of capital utilization is related to the characteristics of city commercial banks:(1)the larger the city commercial banks,The less the negative impact of the efficiency of capital use;(2)the higher the stability(the ratio of owners' equity to total assets),the less the negative impact of local government intervention on its capital efficiency.(3)The effect of government intervention on the capital utilization efficiency of city commercial banks will be affected by the macroeconomic environment.The higher the economic growth rate,the stronger the negative impact of government intervention on the efficiency of city commercial banks' fund use efficiency.These findings have important policy implications.The main contributions of this paper are as follows:(1)The existing literatures mainly focus on the influence of bank internal factors and macroeconomic environment on the efficiency of bank capital use,and little attention is paid to the effect of government intervention on the efficiency of commercial bank funds,This paper focuses on the impact of local government intervention on the efficiency of capital utilization of urban commercial banks,which is the innovation of research perspective.(2)This paper also studies the influence of local government intervention on the efficiency of capital utilization of city commercial banks of different sizes and different stability,and analyzes the effect of government intervention on the efficiency of capital utilization of city commercial banks under different economic growth rates.