Production efficiency of Chinese banks: a revisit

2014 ◽  
Vol 40 (10) ◽  
pp. 969-986 ◽  
Author(s):  
Xiaotian Tina Zhang ◽  
Yong Wang
Keyword(s):  
Technical Efficiency ◽  
Ownership Structure ◽  
Commercial Banks ◽  
Production Efficiency ◽  
State Ownership ◽  
Rapid Expansion ◽  
Scale Efficiency ◽  
Content Type ◽  
Public Banks ◽  
Big Four

Purpose – The last decade witnessed the reform of China's financial sector, during which Chinese commercial banks’ ownership and operation had been significantly changed in order to improve efficiency. The purpose of this paper is to investigates whether these banks have improved their productivity efficiency during their rapid expansion and growth in the post reform era from 2004 to 2011. Design/methodology/approach – Data envelopment analysis is used to investigate the production efficiency of Chinese commercial banks during 2004-2011. First, the technical efficiency (TE) score is constructed to evaluate bank productivity. The TE score is disintegrated into pure technical efficiency (PTE) and scale efficiency (SE) to examine the effects of technical factors and scale economies. Second, the Malmquist index is constructed to explore the year-by-year productivity. Lastly, regression analysis examines how bank characteristics and ownership structure affect productivity efficiency. Findings – The Big Four banks are less efficient than other commercial banks, and public banks are less efficient than private banks. The low efficiency is primarily due to scale inefficiency, rather than PTE. In addition, ownership structure impacts production efficiency. Specifically, foreign ownership is related to high efficiency while state ownership is associated with lower productivity. Research limitations/implications – There were small observations of public banks in China. Thus, a more comprehensive test is impractical to explore whether or not annual changes in ownership structure improve their production efficiency. With more date, such a test will reveal further information about the relationship between ownership and productivity. Originality/value – The authors are the first to assess the production efficiency of Chinese commercial banks after the recent financial reform during which Chinese commercial banks had undergone significant structural changes. The lower overall productivity of Big Four and public banks is a result of scale inefficiency, although these banks are better than their peers with respect to input-output transformation.

scholarly journals Corporate Governance Features and Efficiency: Evidence from the Saudi Arabian Banks

2019 ◽  
Vol 12 (1) ◽  
pp. 43
Author(s):  
Adel Bogari
Keyword(s):  
Corporate Governance ◽  
Technical Efficiency ◽  
Ownership Structure ◽  
Saudi Arabian ◽  
Foreign Ownership ◽  
State Ownership ◽  
Scale Efficiency ◽  
Private Ownership ◽  
Board Size ◽  
Banking Efficiency

The aim of this article is to examine the effect of the Corporate Governance features as measured by the Independence of the board of directors, the board size and the ownership structure (private ownership/State ownership and foreign ownership) on the banking efficiency of Saudi Arabian banks. A data set of the twelve biggest banks for the period 2000 to 2017 is used. As for banking efficiency scores, the methodology is based on the Data Envelopment Analysis (DEA). It allows for Technical Efficiency, Pure Technical Efficiency and Scale Efficiency scores. The results of this study point to the significant role of The Independence (INDEP) variable supported by a positive and significant effect on efficiency in all regressions, indicating a positive relationship with the Technical Efficiency (TE) and the Pure Technical Efficiency (PTE). In the contrary, the independence of the board directors has a negative and significant effect on scale efficiency (SE). According to Board Size variable, results related to this later reveal a negative and a significant effect on technical efficiency (TE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE) in all regressions. Finally, as for the ownership structure variables, results confirm that Private Ownership (OWEN-P) provides positive and significant effects on both the Technical and the Scale Efficiency. This effect seems to be turn to be negative and significant when it is correlated to the Pure Technical Efficiency. State Ownership (OWEN-S) impacts positively and significantly the Technical Efficiency, the Pure Technical Efficiency and Scale Efficiency separately. As for the Foreign Ownership (OWEN-F) variable, except for the Pure Technical Efficiency (PTE), we note a positive and significant effect on the Technical and Scale Efficiency. This study implies better Corporate Governance practices should be supported to improve the overall efficiency and its components. This includes in particular, the Board Size and the Ownership structure variables.

scholarly journals Investigation on firm efficiency: evidence from selected Asia-Pacific countries

2018 ◽  
Vol 25 (8) ◽  
pp. 3062-3080 ◽  
Author(s):  
Khar Mang Tan ◽  
Fakarudin Kamarudin ◽  
Amin Noordin Bany-Ariffin ◽  
Norhuda Abdul Rahim
Keyword(s):  
Technical Efficiency ◽  
Small Firms ◽  
Banking Sector ◽  
Profit Maximization ◽  
Asia Pacific ◽  
Scale Efficiency ◽  
Scale Level ◽  
Firm Efficiency ◽  
Content Type ◽  
Parametric Data

Purpose The purpose of this paper is to examine the firm efficiency or technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) in the selected developed and developing Asia-Pacific countries. Design/methodology/approach The sample consists of a sum of 700 firms in selected developed and developing Asia-Pacific countries over the period from 2009 to 2015. The non-parametric data envelopment analysis under the production approach is used to investigate firm efficiency. Findings On average, this paper discovers that the firms in selected Asia-Pacific countries are moderately efficient. Scale inefficiency (SIE) is found to be the dominant source of firms’ technical inefficiency. The analysis of return to scale shows that the large firms tend to operate at decreasing return to scale level, while the small firms tend to operate at increasing return to scale level. Practical implications The findings from this paper provide significant insights to the policy makers and firm managers in promoting the efficient firms of Asia-Pacific countries. Originality/value The present paper conducts a critical analysis on return to scale in the firms sector of Asia-Pacific context, which is ignored by the past studies on firm efficiency since the analysis of return to scale is mostly emphasized on banking sector. The precise nature of SIE is important for a firm to be efficient in achieving the firm’s primary goals of profit maximization and sustaining market competitiveness.

Efficiency evaluation of Indian oil and gas sector: data envelopment analysis

2019 ◽  
Vol 14 (2) ◽  
pp. 362-378 ◽  
Author(s):  
Vikas Vikas ◽  
Rohit Bansal
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Capital Investment ◽  
Oil And Gas ◽  
Stock Exchange ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Content Type ◽  
Indian Economy ◽  
Oil And Gas Sector

Purpose Data envelopment analysis (DEA), a non-parametric technique is used to assess the efficiency of decision-making units which are producing identical set of outputs using identical set of inputs. The purpose of this paper is to find the technical efficiency (TE), pure technical efficiency and scale efficiency (SE) levels of Indian oil and gas sector companies and to provide benchmark targets to the inefficient companies in order to achieve efficiency level. Design/methodology/approach In the present study, a group of 22 oil and gas companies which are listed on the National Stock Exchange for which the data were available for the period 2013–2017 has been considered. DEA has been performed to compare the efficiency levels of all companies. To measure efficiency, three input variables, namely, combined materials consumed and manufacturing expenses, employee benefit expenses and capital investment and two output variables – operating revenues and profit after tax (PAT) have been considered. On the basis of performance for the financial year ending 2017, benchmark targets based on DEA–CCR (Charnes, Cooper and Rhodes) model have been provided to the inefficient companies that should be focused upon by them to attain the efficiency level. The performance of the companies for the past five years has been examined to check the fluctuations in the various efficiency scores of the companies considered in the study over the years. Findings From the results obtained, it is observed that 59 percent, i.e. 13 out of 22 companies are technically efficient. By considering DEA BCC (Banker, Charnes and Cooper) model, 16 companies are observed to be pure technically efficient. In terms of SE, there are 14 such companies. The inefficient units need to improve in terms of input and output variables and for this motive, specified targets are assigned to them. Some of these companies need to upgrade significantly and the managers must take the concern earnestly. The study has also thrown light on the performance of the companies over last five years which shows Oil India Ltd, Gujarat State Petronet Ltd, Petronet LNG Ltd, IGL Ltd, Mahanagar Gas, Chennai Petroleum Corporation Ltd and BPCL Ltd as consistently efficient companies. Research limitations/implications The present study has made an attempt to evaluate the efficiency of Indian oil and gas sector. The results of the study have significant inferences for the policy makers and managers of the companies operating in the sector. The results of the study provide benchmark target level to the companies of Oil and Gas sector which can help the managers of the relatively less efficient companies to focus on the ways to improve efficiency. The improvement in efficiency of a company would not only benefit the shareholders, but also the investors and other stakeholders of the company. Originality/value In the context of Indian economy, very limited number of studies have focused to measure the efficiency of oil and gas sector in the context of Indian economy. The present study aims to provide the latest insight to the efficiency of the companies especially operating in the Indian oil and gas sector. Further, as per our knowledge, this study is distinctive in terms of analyzing the efficiency of Indian oil and gas sector for a period of five years. The longitudinal study of the sector efficiency provides a bird eye view of the average efficiency level and changes in the efficiency levels of the companies over the years.

scholarly journals Examining banking productivity drivers in MENA banks after financial liberalisation in 1990s

2019 ◽  
Vol 8 (1) ◽  
pp. 59-74
Author(s):  
Hatem Elfeituri
Keyword(s):  
Commercial Banks ◽  
Technological Progress ◽  
Banking Sector ◽  
State Ownership ◽  
Scale Efficiency ◽  
Efficiency Change ◽  
Mena Countries ◽  
Financial Liberalisation ◽  
The Impact ◽  
Banking Productivity

The paper investigates whether deregulation and economic reforms have transformed the MENA banking sector into a more productive and efficient sector. This is the first study to cover a large sample of 11 MENA countries for an extended and recent period (1999-2012). Initially, this paper estimates the productivity and efficiency of MENA commercial banks using Malmquist DEA to estimate productivity (TFP), technological and technical efficiency, and scale efficiency change in order to investigate to what extent banking productivity in MENA economies has improved during the study period. Then, Tobit model is employed to examine the impact of bank and macroeconomic variables on the total factor productivity of MENA commercial banks. The obtained MPI results suggest that commercial banks operating in the Gulf countries have exhibited productivity progress mostly due to the technological progress rather than efficiency change. Results also suggest that expenses preference behaviour would help banks to enhance their productivity in the examined period and MENA countries. Whilst banking productivity is improved by financial reforms and technological progress, such findings overall do not indicate that foreign participation or state ownership lead to enhance productivity of banks, whilst suggesting that a number of sound policies should be implemented taking into account the characteristics of banking sector in MENA countries.

The impact of the Chinese stimulus program on earnings management

2019 ◽  
Vol 27 (4) ◽  
pp. 653-670
Author(s):  
Qian Hao ◽  
Xiangyan Shi ◽  
Danlu Bu ◽  
Liaoliao Li
Keyword(s):  
Earnings Management ◽  
Design Methodology ◽  
State Ownership ◽  
Political Factors ◽  
Stimulus Period ◽  
Content Type ◽  
Management Level ◽  
Factors Influencing ◽  
The Impact ◽  
Big Four

Purpose The purpose of this paper is to investigate the impacts of the 2008 Chinese stimulus program on earnings management. Design/methodology/approach Using a sample period from 2004 to 2011 (per-stimulus period: 2004-2007 and post-stimulus period: 2008-2011), the authors compare the change in earnings management between the firms that received the stimulus funds and those that did not receive the stimulus funds. Findings The authors find that from the pre- to post-stimulus period, the recipient firms experienced a greater increase in downward accrual management and a greater decrease in real management than the non-recipient firms did. This result is primarily driven by the non-state-owned enterprises and firms using non-Big-Four auditors. Originality/value The results suggest that the earnings management level is ultimately determined by the underlying economic and political factors influencing managers’ and auditors’ incentives (Cohen, 2008; Ball et al., 2003). Meanwhile, some mechanisms, such as high-quality audit (Eshleman and Guo, 2014) and state ownership (Wang and Yung, 2011) can also play a role in determining the level of earnings management.

scholarly journals Estimating technical efficiency of Chinese table grape wholesalers

2015 ◽  
Vol 117 (6) ◽  
pp. 1670-1688 ◽  
Author(s):  
Weihua Jiao ◽  
Zetian Fu ◽  
Weisong Mu ◽  
Xiaoshuan Zhang ◽  
Jianjun Lu ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Agricultural Research ◽  
Table Grape ◽  
Scale Efficiency ◽  
Tobit Regression ◽  
Policy Makers ◽  
Content Type ◽  
Explanatory Variables ◽  
Parametric Data ◽  
Grape Varieties

Purpose – The purpose of this paper is to estimate the technical efficiency of Chinese table grape wholesalers and subsequently to examine the degree to which the calculated efficiency correlates with a set of explanatory variables. Design/methodology/approach – A two-stage procedure is applied in this paper. First, a non-parametric data envelopment analysis (DEA) technique is applied to investigate the degree of technical efficiency for Chinese table grape wholesalers. Second, Tobit regression is used to analyze the factors influencing technical efficiency. Findings – Research results reveal that the mean technical efficiency of the sample is 0.544 and 0.860 under constant returns scale (CRS) and VRS assumptions, respectively, and the scale efficiency (SE) is 0.620. The variables of experiences, number of grape varieties on sale, daily selling volumes and fixed sale ratio have a significant effect on technical efficiency, while the other exogenous variables do not affect the efficiency in any significant way. Research limitations/implications – The findings of this research are specific to table grape wholesalers in China, however, the method used in this study is transferrable and applicable to the study of similar problems in others countries. Originality/value – This research has yielded some interesting and original insights into the efficiency level of Chinese grape wholesalers and the factors that influence the level of efficiency. The findings have practical implications for Chinese agriculture policy makers, and are able to stimulate further research of a similar type in the international agricultural research community.

Ownership structure and auditor selection

2020 ◽  
Vol 35 (8) ◽  
pp. 1121-1142
Author(s):  
Curtis M. Hall ◽  
Benjamin W. Hoffman ◽  
Zenghui Liu
Keyword(s):  
Ownership Structure ◽  
Banking Industry ◽  
Audit Fees ◽  
High Quality ◽  
Public And Private ◽  
Content Type ◽  
Industry Expert ◽  
Big 4 ◽  
Private Banks ◽  
Public Banks

Purpose This paper aims to investigate the effect that ownership structure (public vs private) has on the demand for high-quality auditors, specifically in the US banking industry. Design/methodology/approach The authors predict that public banks are more likely to hire a high-quality auditor than private banks and pay a higher audit fee premium for that high-quality auditor (due to higher agency costs, more demand for financial information and higher litigation risk). The authors analyze 2008–2014 banking data from the Federal Reserve using probit and OLS regression analysis to examine if there is a higher probability that public banks choose higher quality auditors and pay higher audit fees when they do so. Findings The results show that private banks are less likely to hire Big 4 auditors and industry-expert auditors than public banks. The authors also find that both private and public banks pay higher audit fees for Big 4 and industry-expert auditors, and that public banks pay a higher premium for Big 4 auditors and industry experts than private banks. Research limitations/implications The findings may not be fully generalizable to other types of firms, as banking is a heavily regulated and complex industry. However, inferences from this study may be generalizable to other similar industries such as insurance or health care. Practical implications The results of this paper imply that public and private banks have differing priorities when hiring their financial statement auditor. This may be of interest to investors and auditing regulators. Social implications The findings of this paper underscore the value of hiring an industry-expert auditor in an industry that is highly complex and regulated. This may be of interest to managers and policymakers. Originality/value Due to data restrictions, the emphasis of prior literature on the banking industry has been on public banks. This study is the first to analyze the differences between public and private banks’ demand for audit services.

Resource based view of internationalization: evidence from Indian commercial banks

2016 ◽  
Vol 10 (1) ◽  
pp. 41-60 ◽  
Author(s):  
Debadutta Panda ◽  
Sriharsha Reddy
Keyword(s):  
Human Resources ◽  
Commercial Bank ◽  
Commercial Banks ◽  
International Diversification ◽  
State Ownership ◽  
Growth Strategies ◽  
Resource Based View ◽  
Content Type ◽  
Secondary Sources ◽  
International Borrowing

Purpose – The purpose of this paper is to understand the influence of internal resource drivers on internationalization of commercial banks. Design/methodology/approach – Panel data on 46 Indian commercial banks from 2008 to 2012 were collected from secondary sources to measure how assets size, human resources, branding and advertising, ownership and age influence the international diversification of the commercial bank. Internationalization of the commercial bank was measured in terms of international advances intensity, international borrowing intensity and number of countries served. Regression models were designed with controlled multicolinearity, heterogeneity and exogeneity. Findings – Higher assets’ size, higher human resources, private ownership and higher organizational age led to internationalization of Indian commercial banks. However, higher branding and advertisement expenses and state ownership were found to be negatively related to international diversification. Originality/value – Internationalization is one of the growth strategies of a firm which cannot be unified and generalized due to resource heterogeneity. So this necessitates a large number of studies sector-wise, sub-sector-wise, product-wise, industry-wise and region-wise. There is a dearth of literature on resource view of internationalization of commercial banks. So, this Indian study adds a new finding on resource-based view of internationalization to the existing body of knowledge.

scholarly journals New Round of Collective Forest Rights Reform, Forestland Transfer and Household Production Efficiency

Land ◽  
2021 ◽  
Vol 10 (9) ◽  
pp. 988
Author(s):  
Jinna Yu ◽  
Yiming Wei ◽  
Wei Fang ◽  
Zhen Liu ◽  
Yujie Zhang ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Production Efficiency ◽  
Positive Impact ◽  
Field Investigation ◽  
Jiangxi Province ◽  
Scale Efficiency ◽  
Policy Effects ◽  
Influence Mechanism ◽  
Household Productivity ◽  
The Impact

The purpose of this paper was to analyze the influence mechanism of the new round of Collective Forest Rights Reform (CFRR) on farmers’ production efficiency from the perspective of forestland transfer. Based on the panel data of field investigation in Jiangxi Province, a panel logit model was used to verify whether the new round of CFRR has affected farmers’ forestland circulation behavior. The results showed that the new round of CFRR has played a significant role in promoting forestland circulation. Secondly, the non-parametric DEA method was used to estimate the technical, scale, and comprehensive efficiency of households. DID and panel quantile models were constructed to analyze the impact of forestland inflow policy and forestland outflow policy effects on rural household productivity. The regression results showed that the effect of forestland inflow has had a significantly positive impact on scale and comprehensive efficiency, but it only had a significant effect on technical efficiency in the 0.1 quartile. The effect of forestland outflow was not found to be significant for technical, scale, and comprehensive efficiency, but it was found to be negative for technical efficiency in the 0.75 quartile and negative for scale efficiency in the 0.5 and 0.75 quantiles.

scholarly journals Analysis of Chinese Commercial Banks’ Risk Management Efficiency Based on the PCA-DEA Approach

2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
Xiao Shi ◽  
Wenqi Yu
Keyword(s):  
Risk Management ◽  
Technical Efficiency ◽  
Commercial Banks ◽  
Economies Of Scale ◽  
Banking System ◽  
Principal Component ◽  
Commercial Banking ◽  
Scale Efficiency ◽  
Management Efficiency ◽  
Chinese Banking Industry

As a special type of enterprises with high risks, Chinese commercial banks’ risk management plays an important role in banks’ business process. Measuring and improving the risk management efficiency of the Chinese commercial banking system has recently attracted increasing interest. Previous studies analyze the business performance of commercial banks from the perspective of the overall management level of banks, and few articles focus on the risk management ability of banks. This paper evaluates the technical efficiencies of Chinese commercial banks’ risk management by the DEA-BCC model with window analysis to come up with some recommendations for policy makers. The technical efficiency is then decomposed into pure technology efficiency and scale efficiency. According to the banking risk supervision indicators released by the China Banking Regulatory Commission, we choose the indicators of 26 commercial banks’ risk management during the period of 2011 to 2019. Principal component analysis (PCA) is applied to delete redundant input indicators. The paper gives a dynamic evaluation of technology efficiency, pure technology efficiency, and scale efficiency. The main empirical results are as follows: (1) the technical efficiency of Chinese commercial banks’ risk management is low, and the differences among three different types of banks are large. (2) The pure technology inefficiency of Chinese commercial banks’ risk management has become a key factor restricting the improvement of the risk management of the Chinese banking industry. (3) The Chinese commercial banks’ risk management faces a serious problem which is economies of scale. (4) The technical efficiencies of Chinese commercial banks’ risk management fluctuate greatly, and management capabilities need to be enhanced urgently.

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