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The sources of bank productivity growth in China during 2002–2009: A disaggregation view

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  • Chang, Tzu-Pu
  • Hu, Jin-Li
  • Chou, Ray Yeutien
  • Sun, Lei

Abstract

This study investigates the sources of bank productivity growth in China over the period 2002–2009. In order to perform this research, we propose an advanced index – input slack-based productivity index (ISP) – a model that disaggregates total factor productivity growth into each input productivity change. Funds, capital, and employees are chosen as the inputs, whereas loans and other earning assets are outputs in this study. Our results show that technological gains transcend the efficiency regressions and result in total factor productivity growth. More specifically, technical progress in capital productivity reveals the dominant force behind the total factor technical change and productivity improvement. In addition, this paper uses these disaggregation terms to find out the competitive advantages and disadvantages of input usages for each Chinese bank. These findings indicate that the ISP index provides more insights than traditional total factor productivity indices.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 36 (2012)
Issue (Month): 7 ()
Pages: 1997-2006

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Handle: RePEc:eee:jbfina:v:36:y:2012:i:7:p:1997-2006

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Web page: http://www.elsevier.com/locate/jbf

Related research

Keywords: Input slack-based productivity index; Productivity growth; Technical change; Efficiency change; China; Banking;

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References

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Citations

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Cited by:
  1. Tang, Liwei & Hu, Zongyi & Zhang, Yongjun, 2014. "基于非径向bml-Dea模型的中国地区工业环境绩效测度
    [The measurement of regional industrial Environmental Performance——based on non-radial BML-DEA model]
    ," MPRA Paper 55380, University Library of Munich, Germany.
  2. Wang, Ke & Huang, Wei & Wu, Jie & Liu, Ying-Nan, 2014. "Efficiency measures of the Chinese commercial banking system using an additive two-stage DEA," Omega, Elsevier, vol. 44(C), pages 5-20.
  3. Bing Xu & Adrian Van Rixtel & Michiel Van Leuvensteijn, 2013. "Measuring bank competition in China: a comparison of new versus conventional approaches applied to loan markets," BIS Working Papers 422, Bank for International Settlements.
  4. Dong He & Honglin Wang, 2013. "Monetary Policy and Bank Lending in China - Evidence from Loan-Level Data," Working Papers 162013, Hong Kong Institute for Monetary Research.
  5. Fujii, Hidemichi & Managi, Shunsuke & Matousek, Roman, 2014. "Indian bank efficiency and productivity changes with undesirable outputs: A disaggregated approach," Journal of Banking & Finance, Elsevier, vol. 38(C), pages 41-50.

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