Bank Productivity in China 1997-2007: An Exercise in Measurement
AbstractThis study examines the productivity growth of the nationwide banks of China and a sample of city commercial, banks for the eleven years to 2007. Estimates of total factor productivity growth are constructed with appropriate confidence intervals, using a bootstrap method for the Malmquist index. The study adjusts for the quality of the output by accounting for the non-performing loans on the balance sheets of the banks and tests for the robustness of the results by examining alternative sets of outputs. The productivity growth of the state-owned commercial banks (SOCBs) is compared with the joint-stock banks (JSCBs) and city commercial banks (CCBs). The weak average growth of TFP of the SOCBs disguises strong technical innovation. As a result, the inefficient banks have a greater efficiency gap to make up. This picture is similar but to a lesser extent for the JSCBs. In contrast the CCBs show strong TFP growth driven by efficiency gains and less so by technical innovation.
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Bibliographic InfoPaper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 252009.
Length: 38 pages
Date of creation: Jul 2009
Date of revision:
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Bank Efficiency; Productivity; Malmquist Index; Bootstrap;
Other versions of this item:
- 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.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-11 (All new papers)
- NEP-BAN-2009-09-11 (Banking)
- NEP-EFF-2009-09-11 (Efficiency & Productivity)
- NEP-TRA-2009-09-11 (Transition Economics)
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