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Rational cost inefficiency and convergence in Chinese banks

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  • Matthews, Kent
  • Xiao, Zhiguo

Abstract

•We construct measures of cost inefficiency in Chinese banks using bootstrap DEA.•Cost inefficiency is separated into technical and allocative inefficiency.•We argue that allocative inefficiency is the result of rational decision making.•Hypotheses as to the source and properties of allocative inefficiency are tested.•The source of allocative inefficiency shows a high level of management efficiency.

Suggested Citation

  • Matthews, Kent & Xiao, Zhiguo, 2020. "Rational cost inefficiency and convergence in Chinese banks," Economic Modelling, Elsevier, vol. 91(C), pages 696-704.
    • Handle: RePEc:eee:ecmode:v:91:y:2020:i:c:p:696-704
    DOI: 10.1016/j.econmod.2019.07.008
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    More about this item

    Keywords

    Modelling bank efficiency; China; Data envelopment analysis; Bootstrapping;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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