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16 J. Banking Reg. 1 (2015)

handle is hein.journals/jlbkrg16 and id is 1 raw text is: Original Article An empirical analysis of China's Big four state-owned banks' performance: A data envelopment analysis Jiyun Xu (Janet) is a PhD student in Finance at Lincoln University, New Zealand. She received her Master of Commerce and Management in finance from Lincoln University, Christchurch, New Zealand, and her BCom in economics from University of Canterbury, Christchurch, New Zealand. She has completed her Master's degree with first class Honors. Her research interests are banking and the stock markets. Christopher Gan is a professor of accounting and finance in the Department of Accounting, Economics and Finance at Lincoln University, Christchurch, New Zealand. He teaches financial markets, institutions and policy, international finance, postgraduate commercial banking and applied research methods. He is the director of Lincoln University Center for International Development. His research interests are Asian economy, stock markets, banking and microfinance. He is the Chief Editor of the Review of Applied Economics. Baiding Hu is a senior lecturer in the Department of Accounting, Economics and Finance at Lincoln University, New Zealand. His research interests are productivity and efficiency estimation, Chinese economy and energy economics. Correspondence: Christopher Gan, Department of Accounting, Economics and Finance, Lincoln University, PO Box 84, Christchurch, 7647, New Zealand ABSTRACT This article examines the efficiency performance and productivity change of China's Big four state-owned commercial banks and to test how the banks react to the bank reform period from 1990 to 2008. The empirical analysis utilizes the data envelopment analysis to estimate the technical and scale efficiency of the Big four state-owned banks on a panel basis. The result shows that the technical efficiency, scale efficiency and productivity change of the Big four state-owned banks reacted positively over the reform period from 1990 to 2008. The result also shows that too much protection, support and intervention from the Chinese govern- ment results in a lack of motivation to innovate and develop new financial products and services. The article concludes that the Chinese government should let the banks make the lending decision base on the commer- cial principles. Journal of Banking Regulation (2015) 16, 1-21. doi:10.1057/jbr.2013.19; published online 25 September 2013 Keywords: efficiency; performance; data envelopment analysis; banks; competition; reforms INTRODUCTION providing services to foreign enterprises, Performance of commercial banks has increased businesses and individuals. There is also a shift the attention of researchers over the past from the traditional bank lending activities several years, because banks are becoming more toward investment banking activities. Competi- international, disintermediation, concentrated tion in the financial markets encourages and contestable in the financial market in consolidation of banks and other financial @ 2015 Macmillan Publishers Ltd. 1745-6452 Journal of Banking Regulation Vol. 16, 1, 1-21 www.palgrave-journals.com/jbr/

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