How scale and ownership are related to financial performance? A productivity analysis of the Chinese banking sector

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Abstract

This paper analyzes productivity with a directional distance function model by investigating convexity and non-convexity in the Chinese banking sector. Two primary findings are summarized. First, there is a distinct change in productivity between large versus small banks and public versus nationwide joint-stock banks; the economies of scale and public orientation of the Chinese economy affect the performance of nationwide joint-stock banks. Second, the number of banks that experience local versus global technological change is small, indicating that productivity changes are driven by national rather than regional dynamics, although minor regional dynamics exist in the data.

Original languageEnglish
Article number16
JournalJournal of Economic Structures
Volume4
Issue number1
DOIs
Publication statusPublished - Dec 1 2015

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Ownership
Productivity analysis
Financial performance
Banking sector
Productivity
Regional dynamics
Directional distance function
Productivity change
Chinese economy
Technological change
Non-convexity
Convexity
Economies of scale

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

Cite this

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title = "How scale and ownership are related to financial performance? A productivity analysis of the Chinese banking sector",
abstract = "This paper analyzes productivity with a directional distance function model by investigating convexity and non-convexity in the Chinese banking sector. Two primary findings are summarized. First, there is a distinct change in productivity between large versus small banks and public versus nationwide joint-stock banks; the economies of scale and public orientation of the Chinese economy affect the performance of nationwide joint-stock banks. Second, the number of banks that experience local versus global technological change is small, indicating that productivity changes are driven by national rather than regional dynamics, although minor regional dynamics exist in the data.",
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AB - This paper analyzes productivity with a directional distance function model by investigating convexity and non-convexity in the Chinese banking sector. Two primary findings are summarized. First, there is a distinct change in productivity between large versus small banks and public versus nationwide joint-stock banks; the economies of scale and public orientation of the Chinese economy affect the performance of nationwide joint-stock banks. Second, the number of banks that experience local versus global technological change is small, indicating that productivity changes are driven by national rather than regional dynamics, although minor regional dynamics exist in the data.

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