Title: Are state-owned banks less efficient? A long- vs. short-run Data Envelopment Analysis of Chinese banks

Authors: W.W. Cooper, Timothy W. Ruefli, Honghui Deng, Jun Wu, Zhongyi Zhang

Addresses: Department of Information, Risk and Operations Management (IROM), The Red McCombs School of Business, University of Texas at Austin, 1 University Station B6500, Austin, TX 78712-0212, USA. ' Department of Information, Risk and Operations Management (IROM), The Red McCombs School of Business, University of Texas at Austin, 1 University Station B6500, Austin, TX 78712-0212, USA. ' MIS Department, The College of Business Administration, University of Nevada, 4505 Maryland Parkway, Box 456034, Las Vegas, NV 89154-6034, USA. ' The College of Business Administration and Economics, Chongqing University, Chongqing 400030, China. ' The College of Business Administration and Economics, Chongqing University, Chongqing 400030, China

Abstract: This paper applies Data Envelopment Analysis (DEA) to determine relative efficiencies of state-owned and joint stock banks in Chongqing, China, during the period 1996–2000. A distinction is made between long- and short-run efficiencies and inefficiencies to allow for the fact that joint stock banks are relatively new to China have more modern management and access to international finance markets while state-owned banks generally use government funding. Using Mann–Whitney rank order statistics produces results in favour of joint stock banks in the short-run but not in the long-run. A relatively new way of distinguishing between long- and short-run performances is utilised that avoids the need for identifying lengthy time periods and data associated with long-run performances.

Keywords: data envelopment analysis; DEA; joint stock banks; long-run efficiency; short-run efficiency; state-owned banks; China; banking efficiencies.

DOI: 10.1504/IJOR.2008.019167

International Journal of Operational Research, 2008 Vol.3 No.5, pp.533 - 556

Published online: 01 Jul 2008 *

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