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Financial Risk and Management Reviews

March 2021, Volume 7, 1, pp 60-66

Performance Evaluation of Chinese Commercial Banks Based on the Malmquist Index

Wenjing Xie

,

Meiling He

,

Guohui Huang

,

Lu He

,

Fan Lin

,

Wen-Tsao Pan

Wenjing Xie 1 ,

Meiling He 1 Guohui Huang 1 Lu He 1 Fan Lin 1 Wen-Tsao Pan 1 
  1. Hunan University of Science and Engineering, School of Economics and Management, Hunan, Yongzhou, Lingling, District, China. 1

Pages: 60-66

DOI: 10.18488/journal.89.2021.71.60.66

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Article History:

Received: 04 August, 2021
Revised: 06 September, 2021
Accepted: 30 September, 2021
Published: 22 October, 2021


Abstract:

Commercial banks have the function of promoting the raising and rational distribution of funds in economic construction in China. Commercial banks are also important in promoting the smooth development of socialist economic activities and the development of national economy and other socialist productive economic activities. At present, one of the biggest difficulties faced by China's commercial banks is the improvement of their efficiency and competitiveness in the face of continuous development and change. This paper establishes the efficiency evaluation model of commercial banks using the DEA-based Malmquist index; it also uses a data envelopment analysis (DEA) to analyze the financial data of nine listed banks in China from 2011 to 2020, studies the efficiency of commercial banks in China, and finds the efficiency differences. Based on empirical research, this paper puts forward corresponding suggestions. The research shows that the key to dealing with this situation depends on the banks’ effective utilization of scientific and technological innovation and technological progress. In order to achieve the goal of innovative and sustainable development of commercial banks, it is necessary to integrate the continuous developments of science and technology with finance.
Contribution/ Originality
The paper's primary contribution is finding that in the face of continuous technological innovation and technological progress, the effective way to improve the performance of Chinese commercial banks is to effectively integrate technology and finance.

Keywords:

DEA, Malmquist, Performance evaluation, Technological progress, Performance analysis, Business performance analysis, Efficiency evaluation, Commercial bank.

Reference:

An, B., Hou, Z., & Li, C. (2021). Research on the economic benefits of my country's commercial banks——based on the three-stage DEA-tobit Model's Efficiency Measurement and influencing sactors analysis. Journal of Jianghan University, 38(1), 86-128.

Cao, C., & Du, W. (2021). Analysis of the financing efficiency of my country's listed commercial banks issuing preferred shares. Accounting Friends, 2021(06), 81-87.

Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making unit. European Journal of Operational Research, 1978(2), 429- 444.

Fare, R., Grosskopf, S., & Norris, M. (1994). Productivity growth, technical progress,and efficiency change in industrialized countries. American Economic eview, 84(5), 1040-1044.

Farrell, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society: Series A (General), 120(3), 253-281.

Feng, Y. (2020). The efficiency analysis of my country's listed commercial banks based on data envelopment method. Time Finance, 2020(16), 65-67.

Li, P., & Hu, J. (2015). The dynamic evolution of the efficiency of my country's commercial banks——based on the DEA-Malmquist non-parametric data envelopment analysis method. Journal of Chizhou University, 29(02), 63-65.

Yang, J., Chen, Y., & Tan, C. (2020). Study on the efficiency evaluation of China's banking industry based on the measurement of slack variables. Journal of Hefei University of Technology, 43(9), 1281-1287.

Yu-Dan, X. (2018). Efficiency comparison of Chinese and foreign commercial banks based on DEA Model. Journal of Hubei University of Economics, 16(5), 46-52.

Zhang, T., & Lei, C. (2019). An empirical analysis of the measurement of the efficiency of my country's commercial banks and Its influencing factors-based on the panel data of 15 banks. Journal of Xi'an University of Finance and Economics, 32(04), 75-81.

Zhao, F., & Zhao, J. (2021). Using the DEA model to analyze and countermeasures to the problems in the operating efficiency of city commercial banks. Economist, 2021(05), 106-114.

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Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

All authors contributed equally to the conception and design of the study.

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