TY  - JOUR
AB  - Purpose This paper investigates the impact of credit risk shocks on the evolution of banking efficiency in China.Design/methodology/approach This paper introduces credit risk as a bad output into a bootstrap data envelopment analysis (bootstrap-DEA) model.Findings During a credit risk shock, the efficiency levels of both state-owned commercial banks and joint-stock commercial banks are significantly higher than those of urban/rural commercial banks, and the efficiency differences between these banks further increase during a period of economic slowdown. This paper also finds that the efficiencies of joint-stock commercial banks are the most sensitive to credit risk shocks; these banks are the first to be affected and the first to completely adjust. However, urban/rural commercial banks adjust very slowly.Originality/value Most scholars still use the traditional DEA method to estimate China's banking efficiency. The bootstrap-DEA method is clearly able to obtain a more exact estimated efficiency score. In fact, in comparison with the bootstrap-DEA model, we found that the traditional DEA method overestimates China's banking efficiency, and this is an especially serious problem for those banks that have a high efficiency score.
VL  - 48
IS  - 1
SN  - 0144-3585
DO  - 10.1108/JES-08-2019-0395
UR  - https://doi.org/10.1108/JES-08-2019-0395
AU  - Li Renyu
AU  - Li Li
AU  - Zou Peijiang
PY  - 2020
Y1  - 2020/01/01
TI  - Credit risk shocks and banking efficiency: a study based on a bootstrap-DEA model with nonperforming loans as bad output
T2  - Journal of Economic Studies
PB  - Emerald Publishing Limited
SP  - 1
EP  - 19
Y2  - 2024/04/25
ER  -