Market structure, risk taking, and the efficiency of Chinese commercial banks

Hou, Xiaohui; Wang, Qing; Zhang, Qi

doi:10.1016/j.ememar.2014.06.001

Cited by 61 publications

(55 citation statements)

References 23 publications

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“…15 Relying on noninterest income could expose banks to return volatility (e.g. Hou et al, 2014;Stiroh, 2006). However, such risk is mitigated by the government's implicit credit guarantee.…”

Section: Profit Scope Economy and Revenue Scale Economymentioning

confidence: 99%

“…Banks with large size are more likely to develop strong relationship with the government at various levels. Under the current financial supervision system in China, banks with stronger ties to the government are more likely to get stronger government support and higher bargaining power against the state monetary authority to obtain more credit line that ultimately allows banks to produce more outputs (e.g., Chang, Liao, Yu, & Ni, 2014;Hou, Wang, & Zhang, 2014).…”

Section: Profit Scope Economy and Revenue Scale Economymentioning

confidence: 99%

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Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Hsiao

Shen

Bian

2015

China Economic Review

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This paper estimates the cost and profit efficiency of the Chinese domestic banking sector to evaluate the effectiveness of China's financial reforms since 1978. We use the performance of foreign banks as the benchmark because foreign banks, subject to intensive worldwide competition, are perceived as possessing superior governing structure and organization, more advanced technologies and better trained labor force. On the other hand, competition in China's banking sector is mainly in the form of nonprice measures, thus putting foreign banks at a disadvantage. We find domestic banks have gradually caught up the cost advantage of foreign banks in a manner consistent with the increased competitive pressure. On the other hand, the profit advantage of domestic banks over foreign banks is widening because of institutional arrangements, cultural and social networks as well as the profit scope and revenue scale economy.

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Section: Profit Scope Economy and Revenue Scale Economymentioning

confidence: 99%

Section: Profit Scope Economy and Revenue Scale Economymentioning

confidence: 99%

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Hsiao

Shen

Bian

2015

China Economic Review

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“…Parametric stochastic frontier analysis (SFA) and non-parametric DEA are the two most commonly adopted methods used for estimating banking sector efficiency (Coelli et al 2005;Margono & Sharma 2006;Bhattacharyya & Pal 2013;Hou et al 2014;Manlagnit 2015).…”

Section: Methodsmentioning

confidence: 99%

Branch expansion and banking efficiency in Sri Lanka’s post‐conflict era

Thilakaweera

Harvie

Arjomandi

2016

Journal of Asian Economics

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This study assesses changes in the technical efficiency of commercial banks in Sri Lanka following the end of armed conflict in 2009. The weighted aggregate-efficiency technique, based on a group-wise heterogeneous subsampling bootstrap approach, is employed to compare efficiency levels during the periods 2007-2009 and 2010-2013. This technique allows for heterogeneity in environmental and regulatory conditions between the two periods while assuming homogeneity within each period. Our results reveal that the banking sector experienced a significant efficiency improvement post-conflict even with unprecedented branch expansion. The findings, therefore, controvert the mainstream view that bank efficiency declined with rapid industry expansion. Further, we conclude that geographical expansion of the banking sector is a viable and effective policy tool to achieve broad-based and inclusive growth for emerging economies like Sri Lanka, particularly in a period of post-conflict recovery.

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“…The bootstrapping method has recently been used in bank efficiency measurement with DEA (Hou et al, 2014;Stewart, Matousek, & Nguyen, 2016;Moradi-Motlagh & Saleh, 2014;N. Zelenyuk, V. Zelenyuk, 2014;Alhassan & Tetteh, 2017), but the bootstrap was applied to the DEA efficiency scores (Le, Harvie, & Arjomandi, 2017).…”

Section: Methodsmentioning

confidence: 99%

“…Some authors are of the opinion that deposits should be regarded as input (Barros, Chen, Liang, & Peypoch, 2011;Asmild & Matthews, 2012;Hou, Wang, Zhang, 2014) while others think that they should be seen as output (Devaney & Weber, 2002;Staub et al, 2010). Consequently, two main approaches have been developed -the intermediation approach (regards deposits as input) and the production approach (regards deposit as output).…”

Section: Overview Of Efficiency Evaluation In the Banking Sectormentioning

confidence: 99%

Measuring the Efficiency of Banks: The Bootstrapped I-Distance Gar Dea Approach

Radojičić

Savić

Jeremić

2018

Technological and Economic Development of Economy

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Abstract. The efficiency of the banking sector, particularly in developing countries, has captivated the attention of various researchers. Contributing to this issue, we present the results of in-depth analysis of the efficiency of Serbian banks during the period 2005-2016. Unlike previous papers evaluating the efficiency of South-Eastern European banks, we emphasize the importance of applying weight restrictions in Data Envelopment Analysis (DEA). The aim is to incorporate every aspect of a decision-making unit's performance to avoid misevaluation of a bank's efficiency. As a possible remedy to the issue, a bootstrapped I-distance is suggested as a statistically sound framework for determining weight bounds in the Global Assurance Region (GAR) DEA model. In terms of average efficiency, the banking sector of Serbia exhibits an improving trend over the period analyzed. The results show how banks can be evaluated when the impact of all the operating inputs and outputs are properly factored into the study.

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Market structure, risk taking, and the efficiency of Chinese commercial banks

Cited by 61 publications

References 23 publications

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Evaluating the effectiveness of China's financial reform—The efficiency of China's domestic banks

Branch expansion and banking efficiency in Sri Lanka’s post‐conflict era

Measuring the Efficiency of Banks: The Bootstrapped I-Distance Gar Dea Approach

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