Nonperforming Loans and Productivity in Chinese Banks, 1997-2006
AbstractA bootstrap method for Malmquist index estimates of productivity growth is constructed with appropriate confidence intervals. This paper adjusts for the quality of the output by accounting for the nonperforming loans (NPLs) on balance sheets and tests the robustness of the results by examining alternative sets of outputs. The productivity growth of state-owned banks and joint-stock banks is compared, and the determinants are evaluated. It was found that the average productivity of Chinese banks improved modestly over this period. Adjusting for the quality of loans by treating NPLs as an undesirable output, the average productivity growth of the state-owned banks was zero or negative, while the productivity of the joint-stock banks was markedly higher.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Chinese Economy.
Volume (Year): 42 (2009)
Issue (Month): 2 (March)
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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=110901
Other versions of this item:
- Matthews, Kent & Guo, Jianguang & Zhang, Nina, 2007. "Non-Performing Loans and Productivity in Chinese Banks: 1997-2006," Cardiff Economics Working Papers E2007/30, Cardiff University, Cardiff Business School, Economics Section.
- Matthews, Kent & Guo, Jianguang & Zhang, Nina, 2007. "Non-Performing Loans and Productivity in Chinese Banks: 1997-2006," Cardiff Economics Working Papers E2008/17, Cardiff University, Cardiff Business School, Economics Section, revised Aug 2008.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alam, Ila M Semenick, 2001. "A Nonparametric Approach for Assessing Productivity Dynamics of Large U.S. Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(1), pages 121-39, February.
- Matthews, Kent & Guo, Jianguang & Zhang, Xu, 2008. "X-efficiency versus Rent Seeking in Chinese banks: 1997-2006," Cardiff Economics Working Papers E2008/26, Cardiff University, Cardiff Business School, Economics Section.
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- Jun Du & Sourafel Girma, 2011. "Cost economies, efficiency and productivity growth in the Chinese banking industry: evidence from a quarterly panel dataset," Empirical Economics, Springer, vol. 41(1), pages 199-226, August.
- Matthews, Kent & Zhang, Nina, 2009.
"Bank Productivity in China 1997-2007: An Exercise in Measurement,"
Cardiff Economics Working Papers
E2009/14, Cardiff University, Cardiff Business School, Economics Section.
- Kent Matthews & Nina Zhang, 2009. "Bank Productivity in China 1997-2007: An Exercise in Measurement," Working Papers 252009, Hong Kong Institute for Monetary Research.
- Chang, Tzu-Pu & Hu, Jin-Li & Chou, Ray Yeutien & Sun, Lei, 2012. "The sources of bank productivity growth in China during 2002–2009: A disaggregation view," Journal of Banking & Finance, Elsevier, vol. 36(7), pages 1997-2006.
- Matthews, Kent & Xiao, Zhiguo & Zhang, Xu, 2009.
"Rational Cost Inefficiency in Chinese Banks,"
Cardiff Economics Working Papers
E2009/13, Cardiff University, Cardiff Business School, Economics Section.
- E. Nur Ozkan Gunay, 2012. "Risk Incorporation and Efficiency in Emerging Market Banks During the Global Crisis: Evidence from Turkey, 2002-2009," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 48(S5), pages 91-102, November.
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