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- Title
Measuring slacks-based efficiency for commercial banks in China by using a two-stage DEA model with undesirable output.
- Authors
An, Qingxian; Chen, Haoxun; Wu, Jie; Liang, Liang
- Abstract
Bank industry plays a critical role in the economic development of China. In this paper, we develop a new two-stage data envelopment analysis approach for measuring the slacks-based efficiency of Chinese commercial banks during years 2008-2012, where the banking operation process of each bank is divided into a deposit-generation stage (division) and a deposit-utilization stage (division). In the approach, the increase of desirable outputs and the decrease of undesirable outputs are simultaneously considered in order to identify the inefficiency of a bank. Three efficiency statuses are first defined for such a system to investigate its input-output performance and divisional performances, and a full efficiency status is then defined based on these statuses. The empirical results show that the improvement of the banks' performances during this period was mainly contributed by the improvement of deposit-utilization stage. Besides, the results also show that our approach can provide a benchmark for the intermediate measures of the two stages of an inefficient bank.
- Subjects
CHINA; BANKING industry; DATA envelopment analysis; ECONOMIC development; BENCHMARKING (Management); FINANCIAL performance
- Publication
Annals of Operations Research, 2015, Vol 235, Issue 1, p13
- ISSN
0254-5330
- Publication type
Article
- DOI
10.1007/s10479-015-1987-1