Bank Reforms, Competition and Efficiency in China’s Banking System: Are Small City Bank Entrants More Efficient?

摘要

＜正＞ This paper analyzes technical efficiency in China’s banking system by large banks andsmall city banks as well as the pre-WTO and post-WTO accession periods. Using anunbalanced panel dataset for 63 banks over 1997-2006 and employing the stochasticfrontier function approach, the empirical results reveal that the new entrants, small citybanks, experienced a slightly higher efficiency score than incumbent large banks, on average.Compared with the pre-WTO accession period, the efficiency score is found to have improvedsignificantly after entry into the WTO as a result of the competition effect. This competitioneffect is particularly relevant for small city banks. Finally, determinants of X-inefficiency areexamined