IDEAS home Printed from https://ideas.repec.org/a/taf/jocebs/v7y2009i2p199-218.html
   My bibliography  Save this article

Cost efficiency analysis in banking industries of ten Asian countries and regions

Author

Listed:
  • Zhi Shen
  • Hailin Liao
  • Thomas Weyman-Jones

Abstract

Despite the great achievement of three decades of economic reform, the Chinese banking sector takes the blame for its dysfunctional system, especially the large amount of non-performing loans. The ease of foreign banks' entry set by the WTO from December 2007 raises our concern of the capability of domestic banks to compete against foreign Asian banks. This study attempts to address this issue by measuring the cost efficiency of ten major Asian banking industries from 1998 to 2005 using panel data stochastic frontier approaches. Based on our preferred consistent panel data estimating models, the higher cost efficiency score from including cross-country environmental variables suggests that differences between countries can explain part of the inefficiency. We also find that the overall cost efficiency level of Chinese commercial banks ranks in the fifth place, suggesting that Chinese banks still need to strengthen their ability in competition. Some policy implications are also suggested.

Suggested Citation

  • Zhi Shen & Hailin Liao & Thomas Weyman-Jones, 2009. "Cost efficiency analysis in banking industries of ten Asian countries and regions," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(2), pages 199-218.
    • Handle: RePEc:taf:jocebs:v:7:y:2009:i:2:p:199-218
    DOI: 10.1080/14765280902847734
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/14765280902847734
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/14765280902847734?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Aiello & Graziella Bonanno, 2018. "On The Sources Of Heterogeneity In Banking Efficiency Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 194-225, February.
    2. Kent Matthews & Zhiguo Xiao & Xu Zhang, 2009. "Rational Cost Inefficiency in Chinese Banks," Working Papers 292009, Hong Kong Institute for Monetary Research.
    3. Anwar Al-Gasaymeh, 2020. "Economic Freedom, Country Risk and Cost Efficiency in Jordan and the GCC Countries," Global Business Review, International Management Institute, vol. 21(1), pages 1-17, February.
    4. Anwar Al-Gasaymeh & Miral R. Samarah, 2023. "Does Country Risk Affect Banking Efficiency: Empirical Evidence from Turkey and Selected Countries from the European Union," Global Business Review, International Management Institute, vol. 24(6), pages 1401-1417, December.
    5. Francesco Aiello & Graziella Bonanno, 2016. "Efficiency in banking: a meta-regression analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 112-149, January.
    6. Ivan Huljak & Reiner Martin & Diego Moccero, 2021. "Bank productivity in CESEE countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/21, pages 83-104.
    7. Hidemichi Fujii & Shunsuke Managi & Roman Matousek & Aarti Rughoo, 2018. "Bank efficiency, productivity, and convergence in EU countries: a weighted Russell directional distance model," The European Journal of Finance, Taylor & Francis Journals, vol. 24(2), pages 135-156, January.
    8. Ivan Huljak & Reiner Martin & Diego Moccero, 2022. "The productivity growth of euro area banks," Journal of Productivity Analysis, Springer, vol. 58(1), pages 15-33, August.
    9. Huljak, Ivan & Martin, Reiner & Moccero, Diego, 2019. "The cost-efficiency and productivity growth of euro area banks," Working Paper Series 2305, European Central Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jocebs:v:7:y:2009:i:2:p:199-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RCEA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.