Are Small City Bank Entrants More Efficient?
Author InfoHui-Lin Lin Chia-Chi Tsao Chih-Hai Yang Abstract This paper analyzes technical efficiency in China’s banking system by large banks and small city banks as well as the pre-WTO and post-WTO accession periods. Using an unbalanced panel dataset for 63 banks over 1997-2006 and employing the stochastic frontier function approach, the empirical results reveal that the new entrants, small city banks, experienced a slightly higher efficiency score than incumbent large banks, on average. Compared with the pre-WTO accession period, the efficiency score is found to have improved significantly after entry into the WTO as a result of the competition effect. This competition effect is particularly relevant for small city banks. Finally, determinants of X-inefficiency are examined. Copyright (c) 2009 The Authors Journal compilation (c) 2009 Institute of World Economics and Politics, Chinese Academy of Social Sciences. Download InfoTo download: If you experience problems downloading a file,
