Download or read book Cost Efficiency in the Chinese Banking Sector written by Yizhe Dong and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the open door policy was embarked upon in 1979, China s banking sector has undergone gradual but notable reforms. A key objective of the reforms implemented by the Chinese government is to build an effective, competitive and stable banking system in order to improve its efficiency and reliability. This study employs both parametric stochastic frontier analysis (SFA) and non-parametric data envelopment analysis (DEA) methods to assess and evaluate the cost efficiency of Chinese banks over the period from 1994 until 2007, a period characterised by far-reaching changes brought about by the banking reforms. To this end, we first compare a number of specifications of stochastic cost frontier models to determine the preferred frontier model which are adopted in our efficiency analysis. The preferred model specification for our sample is the one stage SFA model that includes the traditional input prices, the outputs and the control variables (that is, equity, non-performing loans and the time trend) in the cost frontier and the environmental variables (that is, ownership structure, size, deregulation, market structure and market discipline) in the inefficiency term. Moreover, we also employ two cost DEA models (traditional DEA and New DEA) as a complement to the preferred SFA model for methodological cross-checking purposes. Similar to the previous empirical literature, we find that in most cases only moderate consistency across the different techniques. The cost efficiency of Chinese banks is found to be 91% on average, based on our SFA model, over the period from 1994 until 2007. Based on the results of the DEA and New DEA models, the average cost efficiency for Chinese banks over the sample period is about 89% and 87%, respectively. We find that Chinese banking efficiency has deteriorated after China s admission to the WTO, suggesting that the significant external environmental changes which arose from China s WTO entry may have had a negative impact on its banking efficiency. In addition, we find that the majority of Chinese banks reveal scale inefficiencies and as asset size increases, banks tend to pass from increasing, to constant, and then to decreasing returns to scale. Our findings also show that both state-owned banks and foreign banks are more efficient than domestic private banks and larger banks tend to be relatively more efficient than smaller banks. These and other results suggest that in order to enhance Chinese banking efficiency, the government needs to continue with the banking reform process and in particular, to open up banking markets, to improve risk management and corporate governance in Chinese banks and to encourage the expansion of banks.

Download or read book Cost Efficiency of the Chinese Banking Sector written by Yizhe Dong and published by . This book was released on 2015 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the consistency of efficiency scores obtained from the stochastic frontier analysis and data envelopment analysis methods. We estimate cost efficiency and economies of scale based on an unbalanced panel data set of Chinese banks over the period 1994 to 2007. The results suggest moderate consistency between parametric and non-parametric frontier methods in efficiency scores rankings, identification of best and worst practice banks, the stability of efficiency scores over time and correlation between frontier efficiency and accounting based performance measures. Based on the findings, we conclude that the use of multiple frontier techniques for efficiency analysis is to be strongly recommended and that this methodological cross-checking analysis will result in more robust and convincing assessments of bank performance.

Download or read book Investigating the Performance of Chinese Banks Efficiency and Risk Features written by Yong Tan and published by Springer. This book was released on 2016-10-19 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book applies econometric techniques to test the relationship between efficiency and risk within the banking industry in China. Chapters examine how efficiency has been affected by different types of risk-taking behaviour and how risk has been an important determinant of bank efficiency in the context of the series of reforms impacting banks in China since 1978. The author begins by unpacking these reforms and proceeds to explain relevant theories of efficiency and bank risk before reviewing empirical literature in evaluating risk and efficiency in the banking industry. He then investigates the issues of efficiency and risk in the Chinese banking industry using a number of modern econometric techniques. The final chapters present the results of original empirical research conducted by the author, and provide valuable implications to Chinese government as well as banking regulatory authorities to make relevant policies.

Download or read book Chinese Banking Reform written by Chunxia Jiang and published by Springer. This book was released on 2017-11-10 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a wide-ranging and timely overview of the contemporary Chinese banking system. It charts the vast changes in Chinese banking from before China’s admission to the WTO in 2001 to more recent regulatory reform and developments in the shadow banking sector. The book begins with an economic history of the mono-banking system, and a critical discussion of reforms taken by the government in preparation for China’s entry to the WTO. The second part of the book discusses banking regulation and government policy during and after the global financial crisis in 2008-2009 and their impact on banking, including recent developments. Finally, the book concludes an empirical analysis of the impact of banking reforms on a number of important issues, including bank efficiency, capital structure, competition and financial stability, and risk taking behaviour, and a review of the relevance of shadow banking and internet banking.

Download or read book Efficiency and Competition in Chinese Banking written by Yong Tan and published by Chandos Publishing. This book was released on 2016-10-27 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: Efficiency and Competition in Chinese Banking gives a comprehensive analysis of the industry, including cost, technical, profit, and revenue efficiency. The Chinese banking industry is of global importance. The book estimates the competitive condition of the sector using the Boone indicator, Panzar-Rosse Histatistic, Lerner index, and concentration ratio. The author investigates the impact of competition on efficiency in Chinese banking while controlling for comprehensive determinants of bank efficiency. This title complements Yong Tan’s previous book, Performance, Risk, and Competition in the Chinese Banking Sector, also published by Chandos. Analyzes efficiency in the Chinese banking industry Presents a robust analysis of competition in the Chinese banking sector, using four competition indicators Considers the impact of competition on efficiency Explores the competitive conditions of different banking markets including deposit market, loan market, and non-interest income market

Download or read book Cost Efficiency Analysis of China s Banking Sector Based on SFA Approach written by Ling He and published by . This book was released on 2012 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Development of the Chinese Financial System and Reform of Chinese Commercial Banks written by D. Luo and published by Springer. This book was released on 2016-03-08 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Chinese financial sector, despite having been developed at a much later stage compared with other developed nations, has achieved substantial progresses over the past decades. By the end of 2014, a total of 16 commercial banks had been listed on the stock exchanges, exerting strong impact onto the market indices and contributing significantly to the country's sustained economic growth. This book reviews the evolution of the Chinese financial system, examining the effectiveness of reform strategies made by the government over the last ten years. The first chapter offers a comprehensive review of the development of the Chinese banking sector and the state-owned banks (SOBs). The second chapter focuses on the efficiency of the Chinese banking sector. Employing data envelopment analysis (DEA) and stochastic frontier analysis (SFA), the author tests the change of efficiency within the Chinese banking sector over the past decade. It also looks at the strategy adopted by the Chinese government as the final attempt in reforming its troublesome SOBs and the effectiveness of such a reform strategy. The next chapter examines the corporate governance practise of the Chinese commercial banks, and the author follows by investigating the effect of the 2007 US credit crunch on Chinese banks and the country's wider economy. Other chapters survey the influence of foreign entry to the Chinese domestic banking sector, and the development of shadow banking in China. The author concludes by discussing the role of the central bank, namely the People's Bank of China (PBOC), and its role in implementing effective policies to promote economic growth.

Download or read book Risk Competition and Cost Efficiency in the Chinese Banking Industry written by Yong Tan and published by . This book was released on 2017 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of Chinese commercial banks over the period 2003-2013, this paper tests the interrelationships between credit risk, competition and cost efficiency in the Chinese banking industry under a three-stage least square estimator. The findings suggest that a higher level of competition leads to higher credit risk of Chinese commercial banks and a higher level of efficiency leads to lower credit risk. In addition, it is found that higher level of efficiency results in higher level of competition in the Chinese banking industry and higher levels of credit risk precede an increase in the level of competition. Finally, the results show that Chinese commercial banks with higher levels of credit risk have lower levels of cost efficiency and competition-efficiency hypothesis holds in the Chinese banking industry. The results provide policy implications to the Chinese government and banking regulatory authorities.

Download or read book China s Banking and Financial Markets written by Li Yang and published by John Wiley & Sons. This book was released on 2012-11-27 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This is a very timely book. With the recapitalization and reform of China's banking sector now well under way, the banks are on the brink of a new era of growth and expansion. This work is the definitive reference on the banking sector in China, and is an essential tool for anyone seeking to understand the dynamics of financial intermediation on the Mainland. It sets out the facts, free of the judgment calls that so often cloud the true picture of the health of China's banking system." --Dr. David K.P. Li, Chairman and Chief Executive, The Bank of East Asia, Limited "As China continues its impressive pace of economic growth, the rest of the world is constantly reassessing the opportunities and challenges it presents. This book is the first official report on the status of China's financial services industry and financial markets. For the first time, the international community gets access to the same information that the Chinese government uses in making key policies. Such unique insights make this book an essential read for business leaders, investors, policy makers, scholars, and anyone who is interested in understanding China's profound impact on businesses and consumers globally." --Maurice R. Greenberg, Chairman & CEO, C.V. Starr & Co. "This is the first book that introduces all aspects of the Chinese banking and financial markets to international audiences. From its developmental history to its contemporary challenges, China's banking and finance markets are presented, explored and analyzed with great detail and in great depth. Both the richness of the data and the scholarly strength of the methodology are a milestone. China's increasing participation in global financial markets makes this book a must read for all financial professionals worldwide." --Lefei Liu, Chief Investment Officer, ChinaLife Insurance

Download or read book Cost X Efficiency in China s Banking Sector written by Shelagh Heffernan and published by . This book was released on 2006 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Employing the stochastic frontier approach, this paper investigates cost X-efficiency in China's banking sector over the period 1985-2002. The objective is to assess whether different ownership types and banking reforms affect X-efficiency. A two-stage regression model is estimated to identify the significant variables influencing X-efficiency. The results show that on average, banks are operating 50-60% below the X-efficiency frontier. The jointstock banks are found to be more X-efficient than the state-owned commercial banks, and it appears that X-efficiency was higher during the first phase of bank reform.

Download or read book Performance Risk and Competition in the Chinese Banking Industry written by Yong Tan and published by Chandos Publishing. This book was released on 2014-10-08 with total page 265 pages. Available in PDF, EPUB and Kindle. Book excerpt: Due to the financial crisis around the world, stability of the banking sector is critical. Several rounds of banking reforms in China have aimed to improve performance and competition, and Performance, Risk and Competition in the Chinese Banking Industry provides a comprehensive analysis of performance, risk, competition and their relationships in Chinese banking industry. The book consists of seven chapters: the first chapter gives an introduction, followed by an overview of the Chinese banking sector in chapter two. Chapter three discusses corporate governance in the Chinese banking sector. The fourth and fifth chapters investigate risk, performance, competition, and their relationships. Chapter six outlines future development of the Chinese banking sector, and finally, chapter seven provides a conclusion. Provides a comprehensive analysis of risk conditions in the Chinese banking sector A detailed investigation on the performance of the Chinese banking sector Examines the state of competition

Download or read book Income Diversification in the Chinese Banking Industry Challenges and Opportunities written by Zhixian Qu and published by Springer Nature. This book was released on 2020-05-26 with total page 177 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an overview of the historical financial reforms and regulatory changes in China, highlighting the background to and causes of changes in the income structure of China's banks. It also investigates ongoing concerns with regard to banking diversification in China, and its consequences, amid the global trend of banks’ shift to non-traditional businesses. Focusing on three critical aspects of bank-income diversification, namely the effects on profitability, risk level, and efficiency, it employs the concept of systemically important banks, which describes the scale and degree of influence a bank has in global and domestic financial markets. More importantly, rather than replicating techniques employed in the research on developed markets, it applies several improved methodologies to address bank diversification in the specific context created by China’s unique institutional background and data characteristics, such as GMM-type threshold models and stochastic frontier analysis with the within maximum likelihood estimation. Shedding new light on the current status of income diversification in the Chinese banking sector, this book is a valuable resource for readers in fields such as banking and financial stability. It will also help banking professionals and financial regulatory authorities to better understand the reform of China's financial industry and the future direction of banking.

Download or read book The Development of the Chinese Financial System and Reform of Chinese Commercial Banks written by D. Luo and published by Palgrave Macmillan. This book was released on 2016-02-08 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Chinese financial sector, despite having been developed at a much later stage compared with other developed nations, has achieved substantial progresses over the past decades. By the end of 2014, a total of 16 commercial banks had been listed on the stock exchanges, exerting strong impact onto the market indices and contributing significantly to the country's sustained economic growth. This book reviews the evolution of the Chinese financial system, examining the effectiveness of reform strategies made by the government over the last ten years. The first chapter offers a comprehensive review of the development of the Chinese banking sector and the state-owned banks (SOBs). The second chapter focuses on the efficiency of the Chinese banking sector. Employing data envelopment analysis (DEA) and stochastic frontier analysis (SFA), the author tests the change of efficiency within the Chinese banking sector over the past decade. It also looks at the strategy adopted by the Chinese government as the final attempt in reforming its troublesome SOBs and the effectiveness of such a reform strategy. The next chapter examines the corporate governance practise of the Chinese commercial banks, and the author follows by investigating the effect of the 2007 US credit crunch on Chinese banks and the country's wider economy. Other chapters survey the influence of foreign entry to the Chinese domestic banking sector, and the development of shadow banking in China. The author concludes by discussing the role of the central bank, namely the People's Bank of China (PBOC), and its role in implementing effective policies to promote economic growth.

Download or read book Analysis of Bank Efficiency of Chinese Commercial Banks and the Effects of Institutional Changes on Bank Efficiency written by Chunxia Jiang and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study contributes to the well-established efficiency literature with respect to transition economies and developing counties. Although bank efficiency has been a popular research area in both developed countries and less developed nations, it has been scarce in China mainly due to the lack of data. This study is considered as the first study that comprehensively investigates bank performance using multiple methodologies of financial ratio analysis and stochastic frontier analysis for the period of 1995-2005. The effects of a variety of governance changes have also been differentiated in order to providing policy recommendations for the on-going banking reform. Meanwhile, this study has addressed a number of methodological issues and has developed a more comprehensive stochastic distance function model by combining advantages of existing models, approaches, methods and procedures. Having experienced fundamental banking reforms for more than a quarter of century, the Chinese banking System has stridden towards a modem banking System with significant improvements in profitability, capitalization, and assets quality. Despite of these observed improvements, the banking system is still associated with relatively low profitability and capitalization, poor asset quality, and less liquidity, when benchmarking to 7 selected international renowned banks. One of the most impressive progresses has been the significant decrease in both outstanding NPLs balance and NPL ratio. However, it has noticed that the threat of NPLs problem to the economy as a whole remains unsolved. This study has rationalized economic foundations for the banking reform in China being the principal-agent theory and the budgetary constraint theory. The performance of Chinese banks has been improved and the estimated efficiency level is consistently at 75% in terms of technical efficiency, cost efficiency and profit efficiency. Employing the method of Berger et al. (2005), this study has jointly analyzed the static, selection and dynamic effects of governance changes. Joint-stock ownership has resulted in outstanding performance, while state ownership has been associated with low technical efficiency and profit efficiency but high cost efficiency. Foreign banks are more profit efficient but less cost and technical efficient (static effects). Foreign investors have rationally made their investment decisions by selecting more cost and technical efficient domestic banks, while less profitable domestic banks have been chosen for going public in line with government intension of reforming the unprofitable SOCBs (selection effects). Attracting foreign strategic investors and encouraging banks going public are two major partial privatization strategies, which have been generally proved as effective reform measures. The former tends to have positive impacts on technical efficiency and cost efficiency, while significant short-term gains in profit efficiency have faded in the long-term. The expected profit advantage of foreign ownership seems to take an even longer time to be realized. Going public strategy has resulted in performance improvement in the long-term after short-term losses (dynamic effects). We can not form a conclusion on whether the reform has succeeded, while what we can conclude is the reform is on the track with right direction. It is important to construct good corporate governance, but it is more important to ensure the good governance functioning. If those deep-rooted problems, such as government intervention and NPL problem, can not be dealt with properly in the near future, the chance of success is very small. Thus, our policy recommendations include consolidating up-to-date reform achievements, improving bank's managerial and operational skills, and reducing state's share in banks to lessen government interventions. Estimated efficiency is found to be sensitive to the differences in the definitions of outputs and inputs, especially in the presence of high level of NPLs. The income-based model is superior to the earning assets-based model in the estimation of technical efficiency. Similarly, profit efficiency appears to be more appropriate performance measures over cost efficiency. However, we suggest the use of multiple models and measures to reveal more valuable information. Moreover, in estimating cost function and alternative profit function, market average input prices are found to be more appropriate than banks' specific input prices.

Download or read book An Examination of the Chinese Banking System written by Jiakun Hou and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Heart of Economic Reform written by Donald Daochi Tong and published by Routledge. This book was released on 2017-11-22 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: This title was first published in 2002.Banking reform lies at the heart of economic reform in China and is central to sustaining the countries high economic growth. This timely book covers an important economic policy issue in China, namely the existing and potential roles of the financial sector in the development of the Chinese economy. It explores for the first time the relationship between the reforms of the financial sector, of state-owned enterprises (SOEs) and of the social welfare system. Donald D. Tong presents a wealth of valuable data accompanied by original insights and interpretations. The author also examines the original estimates of the cost of the social welfare burden given that social services such as old age pension, housing, healthcare and education are provided by the SOEs rather than by the private or public sector directly.

Download or read book How China Grows written by James Riedel and published by Princeton University Press. This book was released on 2023-06-06 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why investment and financial reform are essential to China's continued economic well-being Although China's economy has grown spectacularly over the last twenty-five years, economists disagree about how the Chinese economy is likely to fare in the short- and long-term future. Is China's growth sustainable, or has China relied too much on investment, which is subject to diminishing returns, and not enough on technological change? The first book on the relation between investment, finance, and growth in China, How China Grows dismisses this concern. James Riedel, Jing Jin, and Jian Gao argue that investment has not only been the engine of growth, but also the main source of technological progress and structural change in China. What threatens future growth instead, the authors argue, are the weaknesses of China's financial system that undermine efficiency in investment allocation. Financial-sector reform and development are necessary, not only for sustaining long-term growth, but also for maintaining macroeconomic stability. Although it includes some technical economic analysis, How China Grows is accessible to noneconomists and will benefit anyone who is interested in development finance in general and in China's economic growth in particular—whether economists, political scientists, bankers, or business people.