An empirical study of bank efficiency in China after WTO accession

Haiyan Yin, Jiawen Yang and Jamshid Mehran

Global Finance Journal, 2013, vol. 24, issue 2, 153-170

Abstract: This paper documents the technical efficiency of Chinese banks over 1999–2010. With stochastic frontier analysis, we find that Chinese banks are about 18% more efficient in generating lending assets than profits. We also observe an upward trend of bank efficiency after China's entry to WTO in 2001. The improvement of bank efficiency is most prominent for the largest banks with substantial state ownership. We also find that majority state-owned banks are least efficient; well capitalized banks are less efficient; bank efficiency decreases with bank size at the lower end, but banks gain efficiency and realize economies of scale when bank size grows large enough; more fee-generating business reduces efficiency; better management improves efficiency.

Keywords: Bank efficiency; China; Bank characteristics; WTO accession (search for similar items in EconPapers)
JEL-codes: D24 G21 O53 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:24:y:2013:i:2:p:153-170

DOI: 10.1016/j.gfj.2013.07.001

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