A Comparison of Cost Efficiency between China’s Joint-stock Commercial Banks and City Commercial Banks

• Main Authors: Chiang, Miao-Jung, 蔣妙蓉
• Other Authors: Cheng, Cheng-Ping
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/96797440839670667544

碩士 === 國立雲林科技大學 === 財務金融系 === 102 === Nowadays, economic globalization and financial integration is a trend of the world. Competition between Chinese and foreign banks become fierce increasingly. How to improve the competitiveness of banks is particularly important. Competitive strength reflects the quality in the bank's operating efficiency. By Improve cost efficiency then gain competitive advantage will promote the international competitiveness. This study attempts to explore the cost efficiency in China’s joint-stock commercial banks and city commercial banks. Using 12 joint-stock commercial banks and 58 city commercial banks during the 2007–2012 period, seek determinants of performance of China’s joint-stock commercial banks and city commercial banks. Under the stochastic cost frontier model of Battese and Coelli (1995) to estimate the bank individual stochastic frontier cost efficiency between joint-stock commercial banks and city commercial banks. Then exploit the stochastic metafrontier approach (SMF) of Huang et al. (2011) to compare the different cost efficiency between joint-stock commercial banks and city commercial banks. This research find that (1) Governor's tenure has negative effect on cost efficiency of city commercial banks; regional Gross Domestic Product has positive effect on cost efficiency of joint-stock commercial banks. (2) Size of the bank would decrease cost efficiency of joint-stock commercial banks but increase the one of independent banks. (3) Regulatory indicators for banks' cost efficiency of more consistent results. Bank capital adequacy ratio and cost efficiency without significant positive relationship. NPL ratio and the cost to income ratio with the bank's cost efficiency have significantly negative correlation. Deposit ratio has obviously positive effect with banks' cost efficiency. (4) In terms of meta cost efficiency, we find that city commercial banks is superior to joint-stock commercial banks. This result indicates that the general operational efficiency of city commercial banks is better than joint-stock commercial banks.