Bank Reforms, Competition and Efficiency in China's Banking System: Are Small City Bank Entrants More Efficient?
This paper analyzes technical efficiency in China's banking system by large banks and small city banks as well as the pre-WTO and post-WTO accession periods. Using an unbalanced panel dataset for 63 banks over 1997-2006 and employing the stochastic frontier function approach, the empirical results reveal that the new entrants, small city banks, experienced a slightly higher efficiency score than incumbent large banks, on average. Compared with the pre-WTO accession period, the efficiency score is found to have improved significantly after entry into the WTO as a result of the competition effect. This competition effect is particularly relevant for small city banks. Finally, determinants of X-inefficiency are examined. Copyright (c) 2009 The Authors Journal compilation (c) 2009 Institute of World Economics and Politics, Chinese Academy of Social Sciences.
Year of publication: |
2009
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Authors: | Lin, Hui-Lin ; Tsao, Chia-Chi ; Yang, Chih-Hai |
Published in: |
China & World Economy. - Institute of World Economics and Politics. - Vol. 17.2009, 5, p. 69-87
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Publisher: |
Institute of World Economics and Politics |
Saved in:
freely available
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