TY - JOUR
T1 - The effects of governance changes on bank efficiency in China
T2 - A stochastic distance function approach
AU - Jiang, Chunxia
AU - Yao, Shujie
AU - Zhang, Zongyi
PY - 2009/12
Y1 - 2009/12
N2 - China has accelerated banking reform since joining the Word Trade Organisation (WTO) in 2001. Employing a stochastic distance function approach, this paper examines bank technical efficiency and differentiates the static, selection and dynamic governance effects on bank efficiency for the 11-year period 1995-2005. The results show that bank efficiency has improved. Joint-stock ownership is associated with better performance in terms of profitability than state ownership (static effect). Strong selection effects are found for both foreign acquisition and going public reform strategies. Foreign acquisition may benefit domestic banks by efficiency gains in the long run, but privatization via initial public offerings (IPOs) appears to have only some short-term effects. © 2009 Elsevier Inc. All rights reserved.
AB - China has accelerated banking reform since joining the Word Trade Organisation (WTO) in 2001. Employing a stochastic distance function approach, this paper examines bank technical efficiency and differentiates the static, selection and dynamic governance effects on bank efficiency for the 11-year period 1995-2005. The results show that bank efficiency has improved. Joint-stock ownership is associated with better performance in terms of profitability than state ownership (static effect). Strong selection effects are found for both foreign acquisition and going public reform strategies. Foreign acquisition may benefit domestic banks by efficiency gains in the long run, but privatization via initial public offerings (IPOs) appears to have only some short-term effects. © 2009 Elsevier Inc. All rights reserved.
KW - Banking
KW - China
KW - Distance function
KW - Efficiency
UR - http://www.mendeley.com/research/effects-governance-changes-bank-efficiency-china-stochastic-distance-function-approach
U2 - 10.1016/j.chieco.2009.05.005
DO - 10.1016/j.chieco.2009.05.005
M3 - Article
SN - 1043-951X
VL - 20
SP - 717
EP - 731
JO - China Economic Review
JF - China Economic Review
IS - 4
ER -