Assessing the efficiency of financial supply chain for Chinese commercial banks: a two-stage AR-DEA model
Industrial Management & Data Systems
ISSN: 0263-5577
Article publication date: 4 June 2020
Issue publication date: 29 March 2021
Abstract
Purpose
The purpose of this paper is to evaluate Chinese commercial banks efficiency based on different non-performing loans in the process. Moreover, we identified the difference among different types of banks (state-owned commercial banks, joint-stock commercial banks and city commercial banks) and different operation stages (deposit producing sub-stage, profit earning sub-stage and overall stage).
Design/methodology/approach
Assurance region (AR) restrictions are combined with a two-stage data envelopment analysis (DEA) model. The efficiency scores of 26 Chinese commercial banks (listed banks) are analyzed by a two-stage AR-DEA model in the study period of 2013–2017.
Findings
The results show that state-owned commercial banks had better performance than joint-stock commercial banks and city commercial banks over the five-year study period. The development of Internet finance has positive impact on deposit producing sub-stage and insignificant non-homogeneity existed among the different groups in the circumstances of considering different non-performing loans.
Practical implications
The research findings provide practical insights that help bank managers find the defects in operation process, which need to be improved.
Originality/value
Previous studies viewed non-performing loans as an integrated whole variable. The paper divides non-performing loans into three categories based on the risk and investigates the effect of different types of loans on bank efficiency scores.
Keywords
Acknowledgements
The research is supported by the National Natural Science Foundation of China (Nos. 71701059 and 71971203), Fundamental Research Funds for the Central Universities (JZ2019HGTB0095).
Citation
Xu, G. and Zhou, Z. (2021), "Assessing the efficiency of financial supply chain for Chinese commercial banks: a two-stage AR-DEA model", Industrial Management & Data Systems, Vol. 121 No. 4, pp. 894-920. https://doi.org/10.1108/IMDS-01-2020-0022
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited