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The Application Of Economic Value Added On Performance Evaluation Of Listed Banks In China

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  • XIAOSONG ZHENG

Abstract

The five-year protection period after China's banking industry entering the world has come to an end. With China’s financial market integrating into international financial market in 2006, uncertain risks have increased. Also, the external environment that China's banking industry relied on has become more complex. Facing the current situation, China's banking industry uegently needs a set of scientific and comprehensive performance evaluation methods to increase its efficiency, sustainability and competency. Interestingly, Economic Value Added (EVA) as a popular performence evaluation method has not been widely used on the banking industry. This article evaluates the performance, reliability and influential factors of EVA on China's commercial banks based on annual reports (2006-2011) of 12 public listed banks. The EVA model is amended based on the unique features of China's banking industry. By using the CAMEL analytic method and designing a regression model, the current situation of the banking industry is critically analyzed and discussed. At the end of the paper conclusions are made and some relevant suggestions are formed including implementing a comprehensive capital management, improving asset quality and adjusting earning structure in order to further develop the banking industry in China.

Suggested Citation

  • Xiaosong Zheng, 2014. "The Application Of Economic Value Added On Performance Evaluation Of Listed Banks In China," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 6(1 (March)), pages 103-118.
    • Handle: RePEc:shc:jaresh:v:6:y:2014:i:1:p:103-118
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    Cited by:

    1. Yao, Meifang & Di, He & Zheng, Xianrong & Xu, Xiaobo, 2018. "Impact of payment technology innovations on the traditional financial industry: A focus on China," Technological Forecasting and Social Change, Elsevier, vol. 135(C), pages 199-207.

    More about this item

    Keywords

    EVA; performance evaluation; bank; influential factors; China.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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