Efficiency Analysis Of Chinese And Foreign Commercial Banks Based On Three-Stage Dynamic SBM-DEA Model

Commercial banks are an important part of China's banking and financial system.They are responsible for the credit intermediary structure of financial institutions through deposits,loans,exchanges and savings.The Chinese and foreign commercial banks referred to in this study refer to Chinese-funded commercial banks and foreign-funded commercial banks operating in Mainland China.Among them,Chinese-funded commercial banks include: state-owned commercial banks,joint-stock commercial banks,urban commercial banks and rural commercial banks.A foreign commercial bank refers to a commercial bank established by a wholly foreign-owned enterprise in China.Since China joined the World Trade Organization in 2001,it has gradually liberalized restrictions on foreign-funded financial institutions from part to full,making the foreign-funded commercial banks operating in China,and promoting mutual competition and development of both type banks operating in China.With the development of the Internet and the application of various commercial banks in financial product and service innovation in recent years,the efficiency of Chinese and foreign commercial banks has changed,and what are the important internal factors that affect the efficiency of commercial banks? It is the main problem of this thesis.Using classical data envelopment analysis(DEA)to study the efficiency of commercial banks cannot find out the reasons for bank inefficiency,because the classical DEA method regards the bank's business process as a "black box",the intermediate process is ignored.The overall efficiency is high but the efficiency is low in some stages,which makes the bank's efficiency evaluation inaccurate.It is impossible to find important internal reasons that affect the efficiency of commercial banks,so it can not provide bank managers with accurate suggestions for improving operational efficiency.Therefore,how to construct a bank dynamic framework to open the "black box" of commercial bank management process,improve bank efficiency,and find out the internal factors affecting the efficiency of foreign-funded commercial banks in China is a theoretical and practical work.Based on the previous studies,this paper constructs a three-stage dynamic slack-based measure data envelopment analysis(SBM-DEA)model for Chinese and foreign commercial banks from the perspective of bank development capability,liquidity,security and profitability.The model decomposes the overall efficiency of commercial banks into three sub-stage efficiencies: capital organization efficiency,capital flow efficiency,and capital safety and profit efficiency,and analyzes the cycle efficiency of commercial banks over time.Considering the impact of loan quality on bank efficiency,the non-performing loans were used as a carry-over variable.Considering the influence of non-performing loan is called the dynamic model,and the non-performing loan is not considered as the static model.Using the model made in this paper,this thesis evaluates the overall efficiency,capital organization efficiency,capital flow efficiency,capital safety and profit efficiency,and cycle efficiency of 90 Chinese and foreign commercial banks operating in China from 2013 to 2017.The “black box” of the operating process is opened,and studies a comparative analysis of the efficiency of Chinese and foreign commercial banks,in order to identify internal factors affecting the efficiency of Chinese and foreign commercial banks.Based on the study of previous scholars,from the perspectives of bank organizational,liquidity,safety and profitability,the theoretical framework of the three-stage dynamic SBM-DEA model of Chinese and foreign banks is constructed.In addition,this thesis takes the data of 90 Chinese and foreign commercial banks from 2013 to 2017,and has found that the overall efficiency of Chinese banks is relevantly higher than that of foreign banks.Further,this thesis finds that the performance of 6 state-owned large banks including the postal savings bank,and 12 nationwide joint-stock banks has surpassed foreign commercial banks in overall efficiency and overall pure technical efficiency,and have made progress.Chinese banks are significantly lower than the foreign commercial banks in terms of loan quality indicators.Therefore,reducing non-performing loans,improving bank risk control capabilities and improving bank financial innovation are the main factors affecting the development of Chinese and foreign commercial banks.By comparing and analyzing the efficiency of foreign-funded commercial banks,we find the differences and problems between Chinese and foreign commercial banks.We should learn from each other and develop together in order to raise the competition level of Chinese and foreign commercial banks.