Author(s)

Lujun Zhou^1*, Shiyi Zhu²

¹School of Economics, Hunan Agricultural University, Changsha, China.
²School of Economics, Shenzhen University, Shenzhen, China.

Based on Super-SBM DEA model, this paper investigates the efficiency of 12 Chinese commercial banks from 2005 to 2013 under the consideration of undesirable output, and verifies the truth that considering undesirable outputs (non-performing loans) can make research result more authentic by comparing with the consequence obtained without considering undesirable output. On this basis, this paper takes a further advantage of Malmquist index to analyze Chinese commercial bank efficiency. The results show that the efficiency of Chinese commercial Banks mainly depends on technological progress. Therefore, that technological progress is the factor influencing the efficiency of Chinese commercial Banks should not be ignored. Finally, this paper puts forward some relevant proposals for Chinese banking sector to improve operational efficiency and promote the technological progress.

Super-SBM DEA Model, Malmquist Index, Chinese Bank Efficiency, Undesirable Outputs

Zhou, L. and Zhu, S. (2017) Research on the Efficiency of Chinese Commercial Banks Based on Undesirable Output and Super-SBM DEA Model. Journal of Mathematical Finance, 7, 102-120. doi: 10.4236/jmf.2017.71006.