A Study of Coupling Relationship between Financial Supervision and Innovation: Based on the Data of China’s Commercial Bank Listed in the Form of A Shares

Wei Song¹, Chao Yan^1,2, Xiaobao Peng¹, Shanshan Zheng¹

¹School of Public Affairs, University of Science and Technology of China, Hefei, China.
²Retail Business Department, Jiangsu Zijin Rural Commercial Bank Co., Ltd., Nanjing, China.

DOI: 10.4236/jfrm.2015.41001                

Abstract

Financial supervision and financial innovation of commercial banks are the two eternal themes of modern financial development, the research of relationship between financial supervision and innovation has become the focus of financial sector research. Based on the study of financial supervision and innovation index of commercial banks, this paper establishes a coupling model for financial supervision and innovation of commercial banks and conducts an empirical research based on data contained annual reports of commercial banks listed in the form of A Shares, with results showing that financial supervision and innovation of domestic listed commercial banks are at the stage of moderate coupling, upon which relevant suggestions are concluded.

Keywords

Commercial Banks, Financial Supervision, Financial Innovation, Coupling Degree, Entropy Weighting Method

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	CBRC Issued “Guidelines on Financial Innovation of Commercial Banks” and Explained Question and Answer. http://www.gov.cn/gzdt/2006-12/06/content_462773.htm
[2]	Dang, J. Z., & Xiang, J. (2012). A Study of the “Carpal” Regulatory System Impacted on the Operation of China’s Commercial Banks. Fujian Finance, 1, 11-12.
[3]	Finnerty, J. D. (1993). An Overview of Corporation Securities Innovation. Journal of Applied Corporate Finance, 4, 23-39.
[4]	Isik, I., & Hassan, M. K. (2003). Financial Deregulation and Total Factor Productivity Change: An Empirical Study of Turkish Commercial Banks. Journal of Banking & Finance, 27, 1455-1485.
[5]	Kane, E. J. (1981). Accelerating Inflation, Technological Innovation, and the Decreasing Effectiveness of Banking Regulation. Journal of Finance, 36, 355-367. http://dx.doi.org/10.1111/j.1540-6261.1981.tb00449.x
[6]	Li, Y. Y. (2004). Analysis of the Relationship between Financial Supervision and Innovation. New Finance, 2, 41.
[7]	Liang, S. X. (2002). Analysis of the Interactive Relationship between Financial Supervision and Innovation. Forum of World Economics & Politics, 5, 45-46.
[8]	Miller, M. H. (1986). Financial Innovation: The Last Twenty Years and the Next. Journal of Financial and Quantitative Analysis, 21, 459-471. http://dx.doi.org/10.2307/2330693
[9]	Silber, W. L. (1983). The Process of Financial Innovation. The American Economic Review, 73, 89-95.
[10]	Sun, L. J., Xing, X. J., & Zhou, D. Q. (2010). Improved Entropy Weighting Method. Statistics and Decision, 21, 153.
[11]	Weick, K. E. (1976). Educational Organizations as Loosely Coupled Systems. Administrative Science Quarterly, 21, 1-19. http://dx.doi.org/10.2307/2391875
[12]	Xun, T., & Wang, S. (2002). Thinking of the Relationship between Financial Supervision and Innovation. China Finance, 9, 24.
[13]	Zheng, L. (2006). Dynamic Game between Financial Innovation and Supervision: Enlightenments to China’s Financial Supervision. Collected Essays on Finance and Economics, 4, 55.
[14]	Zhu, M. X. (2013). An Empirical Study of Correlation between Innovative Capability and Risk Supervision of China’s Listed Commercial Banks. Journal of Financial Development Research, 4, 62.
[15]	Zhu, Y. Y., & Li, P. (2011). Foreign Strategic Investors and the Innovation Capacity of Domestic Banks: Evidence from 73 Commercial Banks. Review of Investment Studies, 329, 57.