Banking reform and Efficiency in China: 1995-2008
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| Title | Banking reform and Efficiency in China: 1995-2008
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| Author | Yao Shujie, Jiang Chunxia and Feng Genfu |
| Organization | SEF，School of Econmics and Finance |
| Email | fgf@xjtu.edu.cn |
| Key Words | SFA；Efficiency；Banking；China |
| Abstract | Employing a one-step stochastic frontier analysis (SFA) approach, this paper examines bank efficiency in China, paying special attention to the ownership, selection effects and dynamic effects of governance changes. Bank efficiency has improved over the data period 1995-2008. The estimated average cost and profit efficiencies are 74% and 63%, respectively. Joint Stock Commercial Banks (JSCBs) and City Commercial Banks (CCBs) outperform State-owned Commercial Banks (SOCBs). The results suggest a strong selection effect for foreign investors. Foreign ownership participation has a negative effect on profit efficiency in the long-term while initial public offerings (IPOs) improve bank profitability in the short-term. The research findings have important implications on future bank reforms in China in the aftermath of the current financial crisis. |
| Serial Number | WP71 |
| Time | 2011-04-26 |
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