Cost economies, efficiency and productivity growth in the Chinese banking industry: evidence from a quarterly panel dataset

Jun Du, Sourafel Girma

Research output: Contribution to journalArticle

Abstract

This article examines cost economies, productivity growth and cost efficiency of the Chinese banks using a unique panel dataset that identifies banks' four outputs and four input prices over the period of 1995-2001. By assessing the appropriateness of model specification, and making use of alternative methodologies in evaluating the performance of banks, we find that the joint-stock commercial banks outperform state-owned commercial banks in productivity growth and cost efficiency. Under the variable cost assumption, Chinese banks display economies of scale, with state-owned commercial banks enjoying cost advantages over the joint-stock commercial banks. Consequently, our results highlight the ownership advantage of these two types of banks and generally support the ongoing banking reform and transformation that is currently taking place in China.
Original languageEnglish
Pages (from-to)199-226
Number of pages28
JournalEmpirical Economics
Volume41
Issue number1
Early online date3 Apr 2011
DOIs
Publication statusPublished - 2011

Keywords

  • China
  • state ownership
  • productivity
  • efficiency
  • banking performance

Fingerprint Dive into the research topics of 'Cost economies, efficiency and productivity growth in the Chinese banking industry: evidence from a quarterly panel dataset'. Together they form a unique fingerprint.

Cite this