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The Study on the Operating Efficiency of Rural Banks Based on DEA Model: A Case of Jiangsu Province

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  • Xu Lingjuan
  • Wang Yanjun
  • Zhu Huailei

Abstract

The paper takes Jiangsu province as example in Yangtze River Delta, which is economically developed regions. According to previous research and characteristics of rural banks in Jiangsu Province, the input indexes are selected as the number of employees, the number of outlets, total deposits, business and management fees. And the output indexes include total loans, net interest income and net profit. Using DEA model to analyze the operating efficiency of the 65 rural banks in 2016, the paper compares the operating efficiency in different regions and different types of originating bank. The analysis shows that, compared with the central and northern Jiangsu, operating efficiency of rural banks in southern Jiangsu is generally high. The comprehensive technical efficiency value of sample banks that originated by the state-owned banks and joint-stock banks is significantly higher than that originated by rural commercial banks and city commercial banks. Finally, the paper puts forward some suggestions on how to improve the operating efficiency of rural banks.

Suggested Citation

  • Xu Lingjuan & Wang Yanjun & Zhu Huailei, 2017. "The Study on the Operating Efficiency of Rural Banks Based on DEA Model: A Case of Jiangsu Province," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(8), pages 212-220, August.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:8:p:212-220
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    References listed on IDEAS

    as
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    3. Ben Bassem, 2008. "Efficiency of Microfinance Institutions in the Mediterranean: An Application of DEA," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 15(2), pages 343-354, September.
    4. Mamiza Haq & Michael Skully & Shams Pathan, 2010. "Efficiency of Microfinance Institutions: A Data Envelopment Analysis," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 17(1), pages 63-97, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    rural bank; DEA model; operation efficiency; pure technical efficiency; scale efficiency;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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