Investigating the performance of Chinese banks over 2007–2014

Paul Wilson and Shirong Zhao ()
Additional contact information
Shirong Zhao: Dongbei University of Finance and Economics

Annals of Operations Research, 2023, vol. 321, issue 1, No 23, 663-692

Abstract: Abstract This paper examines the performance of Chinese commercial banks before, during and after the 2007–2008 global financial crisis and China’s 4 trillion renminbi stimulus plan during 2008–2010. Fully nonparametric methods are used to estimate technical efficiencies. Recently-developed statistical results are used to test for changes in efficiencies as well as productivity over time, and to test for changes in technology over time. We also test for differences in efficiency and productivity between big and small banks, and between domestic and foreign banks. We find evidence of non-convexity of banks’ production set. Our results suggest that technical efficiency declined at the start of the global financial crisis and again during 2011–2012 after enactment of the stimulus plan. Although efficiency recovered somewhat during 2013–2014, China’s banks ended with lower technical efficiency on average in 2014 than in 2007. We find that productivity declined during 2008–2009, increased during 2013–2014, but as with efficiency ended lower on average in 2014 than in 2007. We find compelling evidence that big banks were more efficient than small banks throughout 2007–2014, and in most years also were more productive. Finally, domestic banks were on average more efficient than foreign banks in 2007, but foreign banks were more efficient than domestic banks in 2014. Similarly, foreign banks were on average more productive than domestic banks in 2007, but less productive than domestic banks in 2012–2014.

Keywords: Efficiency; Productivity; Technology; Chinese banks; Non-parametric (search for similar items in EconPapers)
JEL-codes: C12 C13 C14 G21 L11 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10479-022-04925-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:321:y:2023:i:1:d:10.1007_s10479-022-04925-8

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-022-04925-8

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().