Title: Productivity, efficiency and technological change in banking: empirical evidence from the Chinese banking sector

Authors: Fadzlan Sufian

Addresses: Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia; Khazanah Research and Investment Strategy, Khazanah Nasional Berhad, Level 33, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, Kuala Lumpur 50088, Malaysia

Abstract: By applying the non-parametric Malmquist Productivity Index method, this paper attempts to investigate the sources of productivity changes of China|s State-Owned and Joint-Stock Commercial Banks (JSCBs) during the period 2000–2005. The empirical findings suggest that the China|s banking sector has exhibited productivity progress attributed to the increase in efficiency. The empirical findings suggest that the State-Owned and the JSCBs have exhibited productivity progress of 5.9% and 0.3%, respectively. The second stage multivariate regression results suggest that profitability, income diversification, capitalisation and loan intensity leads to a higher level of total factor productivity, technological change and efficiency, while risk is negatively related to the banks| technological change levels.

Keywords: Malmquist Productivity Index; multivariate regression analysis; China; efficiency; technological change; banking; joint stock commercial banks; JSCBs; state-owned banks; nationalisation; income diversification; capitalisation; loan intensity; total factor productivity; risk; economics; business research.

DOI: 10.1504/IJEBR.2010.035010

International Journal of Economics and Business Research, 2010 Vol.2 No.5, pp.427 - 445

Available online: 01 Sep 2010 *

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