Does Income Diversification Benefit the Sustainable Development of Chinese Listed Banks? Analysis Based on Entropy and the Herfindahl–Hirschman Index

Jiang, Huichen; Han, Liyan

doi:10.3390/e20040255

Cited by 19 publications

(15 citation statements)

References 55 publications

(55 reference statements)

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“…When China joined the World Trade Organization (WTO) in 2001, the Chinese government decided to implement joint-stock reforms of state-owned commercial banks in the global competition. The reform of the Chinese banking industry has stepped into a new stage since 2006 [32]. Chinese banks began to list on the Shanghai and Shenzhen stock exchanges.…”

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

“…China's banking industry was substantially affected by the recent global financial crisis in 2008. Therefore, the Chinese commercial banks were required to supply more financial services and products in order to transform and upgrade their main businesses [32]. Furthermore, the total assets of Chinese banks increased gradually, but net profit growth rate decreased year by year [33,34].…”

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

“…Capital employed efficiency (CEE) shows a declining trend (from 0.3034 to 0.1878), while human capital efficiency (HCE) and structural capital efficiency (SCE) remain stable (see Figure 3). transform and upgrade their main businesses [32]. Furthermore, the total assets of Chinese banks increased gradually, but net profit growth rate decreased year by year [33,34].…”

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

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Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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The purpose of this study is to determine and compare the relationship between intellectual capital (IC) and banks' performance in China and Pakistan. The data are acquired from listed banks in these two countries during 2010-2018. The Value Added Intellectual Coefficient (VAIC ™ ) method is applied as a measure of IC. The results show that capital employed efficiency (CEE) makes the highest contribution to bank performance in both countries. In addition, the profitability of listed Chinese banks is driven by structural capital efficiency (SCE), while human capital efficiency (HCE) positively affects bank profitability and productivity in Pakistan. In addition, we find that the lagged effect of IC has a positive impact on future bank profitability. This study supports greater investment in IC in order to further improve bank performance in emerging Asian markets.Sustainability 2019, 11, 6582 2 of 23 infrastructure, which can bring great facility for companies. Following this, for the ease of channelizing the business transactions, the Bank of China (BOC) commenced its first branch in 2017 in Karachi, the financial capital city of Pakistan. However, before this only the Industrial and Commercial Bank of China (ICBC) operated in Pakistan. Both ICBC and BOC are listed Chinese banks. China and Pakistan are emerging Asian financial markets with good neighborly relations and close cooperation [24]. In emerging markets, the financing and lending role of the banking sector is utmost important for ensuring a sustained economy [17].According to the World Bank, bank capital to assets ratio in China grows from 6.60% to 8.56%, while Pakistan witnesses a downward trend (see Figure 1). Although the nonperforming loans to total gross loans in Pakistan gradually declines over the period 2014-2017, this ratio in China is much lower than that in Pakistan (See Figure 2). Haneef et al. [25] concluded that nonperforming loans have an adverse effect on the performance of banks in Pakistan. These indicate that the Chinese banking industry is much healthier than the Pakistani banking industry, and Pakistani banks operate with relatively higher risk exposure. However, the Pakistani banking system is more open as many foreign banks operating in Pakistan compared to the Chinese banking system [26]. Recently, China has revised the Regulations on the Administration of Foreign-funded Banks to lower the threshold of establishing foreign branches in China, which can stimulate the vitality of banking sector and improve the competitiveness of Chinese and foreign financial institutions. The opening up of the Chinese banking sector will provide opportunities for Pakistani banks to establish their branches in China. Considering that the competition among banks will become severer with financial liberalization, banks will expand their operation in the international market [27]. It will require that banks fully utilize local resources to improve the competitiveness under different business environment. We choose these two countries for comparison, not ...

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Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

Section: Review Of the Chinese Banking Systemmentioning

confidence: 99%

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Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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“…Therefore, research on the banking industry in developing countries will be quite interesting. Moreover, the studies will be of importance as China plays a more important role in the development of the global economy [16][17][18]. In all, our study concerning Chinese banks will fill the gap in previous studies.…”

Section: Introductionmentioning

confidence: 81%

Applying Data Envelopment Analysis in Measuring the Efficiency of Chinese Listed Banks in the Context of Macroprudential Framework

Jiang

2018

Mathematics

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China is a bank-dominated country; therefore, the sustainability of the Chinese banking industry is important for economic development. In this paper, data envelopment analysis (DEA) was combined with the Malmquist index, and we statically and dynamically analyzed the efficiency of listed banks during the period 2012–2017. The results showed that 12 of the 17 banks improved their technical efficiency. The technical efficiency of three banks remained the same, whilst that of two banks had dropped slightly by less than 1.0%. The Chinese government has learned from the lessons of past financial crises to find a way to forestall financial crisis, and implemented macroprudential policy, therefore the banking industry has actively served the real economy and promoted economic development while paying attention to the prevention of financial risks. According to the report of The Banker in 2018, for the first time, the four biggest banks in China topped the list of the Top 1000 World Banks. The research showed that, the Chinese government applied macroprudential framework in the banking supervision, and the listed banks effectively resisted financial risks and realized steady growth. We believe that the macroprudential framework plays a positive role in the economic development and financial stability in China.

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“…Xue et al [5] considered that adjusting and optimizing the layout of the physical branches of commercial banks is crucial to its sustainable development. Jiang and Han [6] suggested that adopting diversification strategy is beneficial to achieving sustainable development of banks.…”

Section: Introductionmentioning

confidence: 99%

Multi-Attribute Decision Making Based on Stochastic DEA Cross-Efficiency with Ordinal Variable and Its Application to Evaluation of Banks’ Sustainable Development

et al. 2020

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Multi-attribute decision making (MADM) is a cognitive process for evaluating data with different attributes in order to select the optimal alternative from a finite number of alternatives. In the real world, a lot of MADM problems involve some random and ordinal variables. Therefore, in this paper, a MADM method based on stochastic data envelopment analysis (DEA) cross-efficiency with ordinal variable is proposed. First, we develop a stochastic DEA model with ordinal variable, which can derive self-efficiency and the optimal weight of each attribute for all decision making units (DMUs). To further improve its discrimination power, cross-efficiency as a significant extension is proposed, which utilizes peer DMUs' optimal weight to evaluate the relative efficiency of each alternative. Then, based on self-efficiency and cross-efficiency of all DMUs, we construct corresponding fuzzy preference relations (FPRs) and consistent fuzzy preference relations (FPRs). In addition, we obtain the priority weight vector of all DMUs by utilizing the row wise summation technique according to the consistent FPRs. Finally, we provide a numerical example for evaluating operation performance of sustainable development of 15 listed banks in China, which illustrates the feasibility and applicability of the proposed MADM method based on stochastic DEA cross-efficiency with ordinal variable.Sustainability 2020, 12, 2375 2 of 15 two parts: classifying and ranking. Classifying can be considered as the grouping of the alternatives based on the similarities of attributes. Ranking is defined as the rank of alternatives from the optimal to the worst [8]. In recent years, some methods have been proposed to handle MADM problems, such as total sum (TS) method [9], simple additive weighting (SAW) method [10], the analytic hierarchy process (AHP) method [11], multiplicative analytic hierarchy process (MAHP) method [12], the technique for order preference by similarity to ideal solution (TOPSIS) method [13], and data envelopment analysis (DEA) method [14].In MADM problems, we need some decision making information including attribute values and attribute weights, which denote the characteristics of alternatives and relative importance of attributes, respectively [7]. Nevertheless, attribute values are known, so we have to obtain attribute weights by the aforementioned approaches. However, DEA is a nonparametric programming efficiency rating technique for evaluating the relative efficiency of DMUs with multiple inputs and outputs, whose evaluation results come from input and output data [15][16][17]. Compared with other methods, attribute weights derived by DEA is relatively objective. Therefore, DEA has been widely applied in many fields for different purposes [18][19][20], such as assessment of environmental sustainability [21,22], supplier selection [23][24][25], and evaluation of the influence of E-marketing on hotel performance [26].Due to the inherent complexity and competition of the real world, MADM problems often involve some random and ordina...

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Does Income Diversification Benefit the Sustainable Development of Chinese Listed Banks? Analysis Based on Entropy and the Herfindahl–Hirschman Index

Cited by 19 publications

References 55 publications

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Applying Data Envelopment Analysis in Measuring the Efficiency of Chinese Listed Banks in the Context of Macroprudential Framework

Multi-Attribute Decision Making Based on Stochastic DEA Cross-Efficiency with Ordinal Variable and Its Application to Evaluation of Banks’ Sustainable Development

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