The Global Financial Crisis, Fiscal Stimulus Package and the Chinese Banking Sector — A Pre- and Post-Efficiency Analysis

Dong Xiang (), Parmendra Sharma and Yuming Zhang ()
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Dong Xiang: School of Management, Qilu University of Technology (Shandong Academy of Sciences), China
Parmendra Sharma: Griffith University, Australia
Yuming Zhang: School of Management, Shandong University, China

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2019, vol. 22, issue 02, 1-43

Abstract: This study is the first to examine the impact of two recent key events on technical, cost and profit efficiencies of Chinese commercial banks — the 2007 Global Financial Crisis (GFC) and the subsequent Chinese Government’s 2009 fiscal stimulus package. Stochastic frontier analysis together with univariate and multivariate tests are used on a sample of 143 banks, including the big five, joint stock, city, rural and foreign, over the 2006–2013 period. Overall, there is substantial scope for improvement — cost efficiency could improve by up to 50%; technical and profit efficiencies by up to 30%. The effect of the crisis and the stimulus package on various overall and segment efficiencies is, at best, inconsistent and inconclusive.

Keywords: Global financial crisis; fiscal stimulus package; banks; technical; cost; and profit; efficiency; China (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S0219091519500115

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