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Economic reforms, efficiency and productivity in Chinese banking

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Abstract

This paper analyzes the impact of banking reforms on efficiency and total factor productivity (TFP) change in Chinese banking industry. Using an input distance function, we find that joint-equity banks are more efficient than wholly state-owned banks (WSOBs). Furthermore, both WSOBs and joint-equity banks are found to be operating slightly below their optimal size, suggesting potential advantages in expansion of their businesses. Overall, TFP growth was 4.4% per annum for the sample period 1993–2002. Joint-equity banks experienced much higher growth in TFP (5.5% per annum) compared to the WSOBs (1.4% per annum).

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Authors and Affiliations

  1. Department of Economics, State University of New York, Binghamton, NY, 13902, USA

    Subal C. Kumbhakar & Dan Wang

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  1. Subal C. Kumbhakar
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  2. Dan Wang
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Correspondence to Subal C. Kumbhakar.

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Kumbhakar, S.C., Wang, D. Economic reforms, efficiency and productivity in Chinese banking. J Regul Econ 32, 105–129 (2007). https://doi.org/10.1007/s11149-007-9028-x

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  • DOI: https://doi.org/10.1007/s11149-007-9028-x

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