Efficiency and productivity of Chinese national and regional banks

This thesis investigates the performance of Chinese commercial banks by evaluating their efficiency and productivity. Beginning with cost efficiency analysis of Chinese commercial banks over the time period 2002 to 2014. The thesis then analyses the efficiency and productivity of regional banks, specifically urban commercial banks. Based on geographical characteristics of regional banks, the spatial parameters are added in the production function in order to capture spatial spillovers. A new spatial total factor productivity index to measure productivity is introduced. The results indicate that the efficiency of Chinese commercial banks increased in the pre- and post-crisis period but dropped during the financial crisis. In addition, the results suggest that the joint-stock and regional banks are more efficient than other type of banks in China. Another notable result is the significant positive spatial relationship in the production process of the Chinese regional banks. Overall productivity has increased from 2013 to 2016, which is mainly improved by the return to scale changing.