Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/65785 
Year of Publication: 
2008
Series/Report no.: 
Cardiff Economics Working Papers No. E2008/26
Publisher: 
Cardiff University, Cardiff Business School, Cardiff
Abstract: 
This study demarcates cost-inefficiency in Chinese banks into X-inefficiency and rent-seeking-inefficiency. A protected banking market not only encourages weak management and X-inefficiency but also public ownership and state directed lending encourages moral hazard and bureaucratic rent seeking. This paper uses bootstrap non-parametric techniques to estimate measures of X-inefficiency and rent-seeking inefficiency for the 4 state owned banks and 10 joint-stock banks over the period 1997-2006. The paper adjusts for the quality of loans by treating NPLs as a negative output. The paper shows that Chinese banks have reduced cost inefficiency and reduced X-inefficiency at a faster rate than rent-seeking inefficiency.
Subjects: 
Bank Efficiency
China
X-inefficiency
DEA.
Bootstrapping
JEL: 
D23
G21
G28
Document Type: 
Working Paper

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