IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v47y2026i3p740-755.html

Developing China's Real Economy: Efficiency Evaluation and Resource Allocation of Financial Services

Author

Listed:
  • Ce Guo
  • Linda L. Zhang
  • Qiwei Xie

Abstract

Unlike the available studies focusing on either the regional or corporate level, in this study, we examine financial service at the industry level, in hope of better developing China's real economy. In our data envelopment analysis‐based approach, we first evaluate the efficiency of available financial services in different industries contributing to China's real economy. Subsequently, based on the efficiency evaluation results we optimize financial resource allocation, this alleviating misallocations in the real economy. We demonstrate our approach using data pertaining to financial services in 16 major industries in China. The results highlight significant differences in the efficiency of financial services in different industries. Several industries, such as the information transmission, computer services and software industry, and the education industry, have higher financial service efficiencies, while other industries, for example, the transportation, warehousing, and postal services industry, the wholesale and retail industry, have lower efficiencies. Regarding this, it is necessary to optimize financial resource allocation to improve financial services. In addition, we point out that excess financial resources (e.g., stock trading volume, loans) should be reallocated from, for example, the construction and manufacturing industries to others, including the agriculture, forestry, animal husbandry, and fishery industry and the mining industry. Our results also reveal that the shortage of certain financial resources seriously affects the financial service efficiency. Based on the results, we offer policy recommendations to facilitate financial service improvement. For instance, Chinese government should make efforts to promote collaborative development among industries and to reduce the financial service efficiency gap in different industries.

Suggested Citation

  • Ce Guo & Linda L. Zhang & Qiwei Xie, 2026. "Developing China's Real Economy: Efficiency Evaluation and Resource Allocation of Financial Services," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 47(3), pages 740-755, April.
    • Handle: RePEc:wly:mgtdec:v:47:y:2026:i:3:p:740-755
    DOI: 10.1002/mde.70071
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.70071
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.70071?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
    ---><---

    References listed on IDEAS

    as
    1. Bouzidis, Thanasis & Karagiannis, Giannis, 2022. "An alternative ranking of DMUs performance for the ZSG-DEA model," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    2. Ren, Siyu & Hao, Yu & Xu, Lu & Wu, Haitao & Ba, Ning, 2021. "Digitalization and energy: How does internet development affect China's energy consumption?," Energy Economics, Elsevier, vol. 98(C).
    3. Altoé, Andrey Vinícius & da Costa Jr., Newton & Lopes, Ana Lúcia Miranda & Veloso, Thiago Roberto Magalhães & Saurin, Valter, 2017. "Technical efficiency and financial performance in the Brazilian distribution service operators," Socio-Economic Planning Sciences, Elsevier, vol. 59(C), pages 79-92.
    4. Halkos, George & Petrou, Kleoniki Natalia, 2019. "Treating undesirable outputs in DEA: A critical review," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 97-104.
    5. Yang, Min & Li, Yong Jun & Liang, Liang, 2015. "A generalized equilibrium efficient frontier data envelopment analysis approach for evaluating DMUs with fixed-sum outputs," European Journal of Operational Research, Elsevier, vol. 246(1), pages 209-217.
    6. Son Ngoc Chu & Ligang Song, 2015. "Promoting Private Entrepreneurship for Deepening Market Reform in China: A Resource Allocation Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(1), pages 47-77, January.
    7. Boso, Nathaniel & Danso, Albert & Leonidou, Constantinos & Uddin, Moshfique & Adeola, Ogechi & Hultman, Magnus, 2017. "Does financial resource slack drive sustainability expenditure in developing economy small and medium-sized enterprises?," Journal of Business Research, Elsevier, vol. 80(C), pages 247-256.
    8. Gregor Matvos & Amit Seru, 2014. "Resource Allocation within Firms and Financial Market Dislocation: Evidence from Diversified Conglomerates," The Review of Financial Studies, Society for Financial Studies, vol. 27(4), pages 1143-1189.
    9. HATAMI-MARBINI, Adel & TAVANA, Madjid & SAATI, Saber & AGRELL, Per J., 2013. "Allocating fixed resources and setting targets using a common-weights DEA approach," LIDAM Reprints CORE 2474, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Yang, Min & Li, Yongjun & Chen, Ya & Liang, Liang, 2014. "An equilibrium efficiency frontier data envelopment analysis approach for evaluating decision-making units with fixed-sum outputs," European Journal of Operational Research, Elsevier, vol. 239(2), pages 479-489.
    11. Cole, Matthew A. & Elliott, Robert J.R. & Wu, Shanshan, 2008. "Industrial activity and the environment in China: An industry-level analysis," China Economic Review, Elsevier, vol. 19(3), pages 393-408, September.
    12. Xie, Qiwei & Hu, Ping & Jiang, An & Li, Yongjun, 2019. "Carbon emissions allocation based on satisfaction perspective and data envelopment analysis," Energy Policy, Elsevier, vol. 132(C), pages 254-264.
    13. Cook, Wade D. & Kress, Moshe, 1999. "Characterizing an equitable allocation of shared costs: A DEA approach," European Journal of Operational Research, Elsevier, vol. 119(3), pages 652-661, December.
    14. Hamzeh Amirteimoori & Alireza Amirteimoori & Mahdi Karbasian, 2020. "Performance measurement of gas companies with fixed-sum inputs: a DEA-based model," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(7), pages 1591-1603, April.
    15. Yanli Wang & Xiaodong Lei & Fan Yang & Na Zhao, 2021. "Financial friction, resource misallocation and total factor productivity: theory and evidence from China," Journal of Applied Economics, Taylor & Francis Journals, vol. 24(1), pages 393-408, January.
    16. Dekle, Robert & Tsang, Andrew, 2023. "Monetary policy shocks and resource misallocations in the Periphery: Evidence from Chinese provincial bond yields," Journal of International Money and Finance, Elsevier, vol. 137(C).
    17. Lv, Chengchao & Shao, Changhua & Lee, Chien-Chiang, 2021. "Green technology innovation and financial development: Do environmental regulation and innovation output matter?," Energy Economics, Elsevier, vol. 98(C).
    18. Ding, Wangwang & Du, Juntao & Kazancoglu, Yigit & Mangla, Sachin Kumar & Song, Malin, 2023. "Financial development and the energy net-zero transformation potential," Energy Economics, Elsevier, vol. 125(C).
    19. Jingrong Li & Bowen Li, 2022. "Digital inclusive finance and urban innovation: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 1010-1034, May.
    20. You, Kefei & Solomon, Offiong Helen, 2015. "China's outward foreign direct investment and domestic investment: An industrial level analysis," China Economic Review, Elsevier, vol. 34(C), pages 249-260.
    21. Yong Xu & Xin Zhao & Xiaoxiao Zhou & Ling Yuan, 2021. "Financial Structure and Capital Allocation Efficiency: An Empirical Analysis of China from 2005–2018," Applied Economics, Taylor & Francis Journals, vol. 53(29), pages 3347-3358, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chu, Junfei & Dong, Yanhua & Yuan, Zhe, 2024. "An improved equilibrium efficient frontier data envelopment analysis approach for evaluating decision-making units with fixed-sum outputs," European Journal of Operational Research, Elsevier, vol. 318(2), pages 592-604.
    2. Yu, Shasha & Lei, Ming & Deng, Honghui, 2023. "Evaluation to fixed-sum-outputs DMUs by non-oriented equilibrium efficient frontier DEA approach with Nash bargaining-based selection," Omega, Elsevier, vol. 115(C).
    3. Wang, Weijiao & Xu, Fei & Chu, Junfei & Dong, Yanhua & Yuan, Zhe, 2025. "Determining the equilibrium efficient frontier by proportional frontier shifting for data envelopment analysis with fixed-sum outputs," Omega, Elsevier, vol. 130(C).
    4. Yongjun Li & Wenhui Hou & Weiwei Zhu & Feng Li & Liang Liang, 2021. "Provincial carbon emission performance analysis in China based on a Malmquist data envelopment analysis approach with fixed-sum undesirable outputs," Annals of Operations Research, Springer, vol. 304(1), pages 233-261, September.
    5. Lozano, Sebastián, 2023. "Bargaining approach for efficiency assessment and target setting with fixed-sum variables," Omega, Elsevier, vol. 114(C).
    6. Li, Feng & Zhang, Danlu & Zhang, Jinyu & Kou, Gang, 2022. "Measuring the energy production and utilization efficiency of Chinese thermal power industry with the fixed-sum carbon emission constraint," International Journal of Production Economics, Elsevier, vol. 252(C).
    7. Bouzidis, Thanasis & Karagiannis, Giannis, 2022. "An alternative ranking of DMUs performance for the ZSG-DEA model," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    8. Lozano, Sebastián & Contreras, Ignacio, 2022. "Centralised resource allocation using Lexicographic Goal Programming. Application to the Spanish public university system," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    9. Li, Jiawei & Qiu, Zhiyi & Wei, Fangqing & Liang, Jingwei, 2025. "Regional CO2 emission efficiency in China and configurational paths for improvement," Technological Forecasting and Social Change, Elsevier, vol. 220(C).
    10. Na Lu & Tiantian Shan & Wen Li & Xuan Liu & Weidong Wang, 2025. "Does the Digital Economy Promote Green Land Use Efficiency?," Sustainability, MDPI, vol. 17(16), pages 1-22, August.
    11. Li, Feng & Zhu, Qingyuan & Chen, Zhi, 2019. "Allocating a fixed cost across the decision making units with two-stage network structures," Omega, Elsevier, vol. 83(C), pages 139-154.
    12. Chu, Junfei & Hou, Tianteng & Li, Feng & Yuan, Zhe, 2024. "Dynamic bargaining game DEA carbon emissions abatement allocation and the Nash equilibrium," Energy Economics, Elsevier, vol. 134(C).
    13. Yu Hao & Yunxia Guo & Haitao Wu, 2022. "The role of information and communication technology on green total factor energy efficiency: Does environmental regulation work?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 403-424, January.
    14. Jiasen Sun & Guo Li, 2022. "Optimizing emission reduction task sharing: technology and performance perspectives," Annals of Operations Research, Springer, vol. 316(1), pages 581-602, September.
    15. Wen, Huwei & Zhong, Qiming & Lee, Chien-Chiang, 2022. "Digitalization, competition strategy and corporate innovation: Evidence from Chinese manufacturing listed companies," International Review of Financial Analysis, Elsevier, vol. 82(C).
    16. Marzieh Ghasemi & Mohammad Reza Mozaffari & Farhad Hosseinzadeh Lotfi & Mohsen Rostamy malkhalifeh & Mohammad Hasan Behzadi, 2022. "New Approach in Fixed Resource Allocation and Target Setting Using Data Envelopment Analysis with Common Set of Weights," Complexity, John Wiley & Sons, vol. 2022(1).
    17. Haitao Wu & Ruohan Zhong & Zhen Wang & Yuanfeng Qu & Xiaodong Yang & Yu Hao, 2024. "How Does Industrial Intellectualization Affect Energy Intensity? Evidence from China," The Energy Journal, , vol. 45(2), pages 49-70, March.
    18. Chen, Ya & Li, Yongjun & Liang, Liang & Salo, Ahti & Wu, Huaqing, 2016. "Frontier projection and efficiency decomposition in two-stage processes with slacks-based measures," European Journal of Operational Research, Elsevier, vol. 250(2), pages 543-554.
    19. Zhou, Fengxiu & Wen, Huwei & Lee, Chien-Chiang, 2022. "Broadband infrastructure and export growth," Telecommunications Policy, Elsevier, vol. 46(5).
    20. Huang, Xinpeng & Meng, Fanshi, 2023. "Digital finance mitigation of ' resource curse ' effect: Evidence from resource-based cities in China," Resources Policy, Elsevier, vol. 83(C).

    More about this item

    Statistics

    Access and download statistics

    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:wly:mgtdec:v:47:y:2026:i:3:p:740-755. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.