Determinants of Commercial Bank Efficiency in China: Two-Stage Data Envelopment Analysis (DEA) Approach 2016-2021 Period


Authors : Charisa Qudsi

Volume/Issue : Volume 8 - 2023, Issue 1 - January

Google Scholar : https://bit.ly/3TmGbDi

Scribd : https://tinyurl.com/2433zrar

DOI : https://doi.org/10.5281/zenodo.8054911

Policies before economic reform and liberalization decades ago made China a stagnant and impoverished. The opening of China's economic gates to international trade in the free market reforms of 1979, made China a developing country with the fastestgrowing economy in the world. The current growth in total assets and contributions of Chinese financial institutions cannot be separated from the role of large banks belonging to the central government and society as a whole. The estimation technique in this study uses the Two-Stage Data Envelopment Analysis model. This model uses 6 cross section data units and 6 time series data sets. Throughout the study period, all state-owned commercial banks in China performed efficiently (stage 1). The results of the study (stage 2) show that stateowned commercial banking companies in China tend to perform efficiently throughout the study period. Based on the constructed hypothesis construct, of the four hypotheses, only one hypothesis is statistically accepted. Chinese government-owned commercial banks can continue to perform efficiently even during an uncertain situation, as evidenced in the 2020-2021 research sample showing that efficiency levels are consistently in the high category amid the conditions of the Covid-19 pandemic

Keywords : Bank Efficiency, Capital Adequacy Ratio, Loan to Deposit Rati, Interest Income, Gross Domestic Product, and Data Envelopment Analysis.

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