Cost X-efficiency in China's banking sector

A DEA-TOPSIS approach for ranking credit institutions

“…However, the proposed study of this paper has considered employee wage, bank deposit and administration expenses as necessary input parameters. We have presented the results of our investigation for some experts in industry and they have confirmed that the inputs used in this paper represent better factors for efficiency measurement than traditional figures introduced by Mester, (1996), Fu and Heffernan (2007) and Srairi (2010). Based on the results of our survey, it is possible to reduce the number of employees for inefficient units and increase the relative efficiencies, significantly.…”

The Development of the Chinese Financial System and Reform of Chinese Commercial Banks

“…Chen et al (2005b) found that the financial deregulation of the mid-1990s improved cost efficiency levels including both technical and allocative efficiency significantly. Dividing this sample into two sub-periods, the deregulatory period (1993)(1994)(1995)(1996)(1997)(1998), and the post-deregulatory period (1999)(2000)(2001)(2002), Kumbhakar and Wang (2005) failed to find evidence to support the effectiveness of deregulation as a means to improve banks efficiency, a conclusion consistent with Fu and Heffernan (2007). Both the JECBs and SOBs experienced a decline in technical efficiency between the first (1985)(1986)(1987)(1988)(1989)(1990)(1991)(1992) and second stages (1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002) of bank reform.…”

“…For the literatures on China comparing bank performance, early studies usually adopted ratio analysis. Measured by ROA and ROE, Chinese banks were found to generate lower returns with higher financial risks than their Western counterparts (Li et al, 2001 (Chen et al 2005b;Fu and Heffernan, 2007;Jiang et al, 2009;Ariff and Can, 2008;Zhang, 2009, Berger et al, 2009). …”

“…for the EU banks and around 68% for the emerging markets were usually identified (Fu and Heffernan, 2007). In summary, these studies were focused on three aspects: the comparison of ownership structure (Weill, 2003;Kraft and Tirtiroglu, 1998;Taci and Zampieri, 1998;Opiela, 2000;Hasan and Marton, 2003); the effects of mergers and acquisitions (Berger and Humphrey, 1992;Rhoads, 1993;Shaffer, 1993), and the influence of financial liberalization and deregulation (Unite and Sullivan, 2003;Chen, 2001;Claessens et al, 2001;Hao et al, 2001).…”

China's State-Owned Banks' Lending Practices, 1994-2005: Empirical Tests and Policy Implications

“…9 The SOCBs certainly seem to offer considerable room for improvement in this regard based upon the latest estimates of their efficiency levels and prudential ratios. And the more recently-established joint-stock banks, with more limited government ownership and control, appear to have significantly outperformed the SOCBs (Fu, Heffernan) [20] where there is no government regulation and the banks are profit-maximizing firms. We then impose regulatory constraints to capture government influence on bank lending behavior.…”