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DEA considering technological heterogeneity and intermediate output target setting: the performance analysis of Chinese commercial banks

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  • Xiaohong Liu

    (University of Science and Technology of China)

  • Feng Yang

    (University of Science and Technology of China)

  • Jie Wu

    (University of Science and Technology of China)

Abstract

This study proposes a two-stage data envelopment analysis model based on the meta-frontier boundary and intermediate output goal setting. Comparing to the traditional models, the proposed model is able not only to consider technology heterogeneity of decision making units, but also to target the intermediate output. The proposed model was applied to an analysis of 28 Chinese commercial banks (CCBs). Empirical analysis has obtained some valuable research results. First, the efficiency of the CCBs’ deposit sub-system is not very high, especially in terms of the deposit efficiency of city commercial banks (CBs). Second, in the deposit sub-system, the efficiency gap among state-owned commercial banks (SBs) is higher than the joint stock commercial banks (JBs) and the CBs. Third, in the loan sub-system, the efficiency gap among SBs and CBs is higher than that in the JBs. Fourth, the deposits of more than half of CCBs are not on the frontier of efficiency, showing that the financial resource allocation of CCBs is severely ineffective. Finally, this study divides CCBs into four categories and provides specific recommendations to improve performance and deposit target setting.

Suggested Citation

  • Xiaohong Liu & Feng Yang & Jie Wu, 2020. "DEA considering technological heterogeneity and intermediate output target setting: the performance analysis of Chinese commercial banks," Annals of Operations Research, Springer, vol. 291(1), pages 605-626, August.
    • Handle: RePEc:spr:annopr:v:291:y:2020:i:1:d:10.1007_s10479-019-03413-w
    DOI: 10.1007/s10479-019-03413-w
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    3. David Cummins, J. & Rubio-Misas, María, 2021. "Country factor behavior for integration improvement of European life insurance markets," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 186-202.
    4. Amar Johri & Mohammad Asif & Preeti Tarkar & Waseem Khan & Rahisha & Mohammad Wasiq, 2024. "Digital financial inclusion in micro enterprises: understanding the determinants and impact on ease of doing business from World Bank survey," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
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    6. Jorge Antunes & Abdollah Hadi-Vencheh & Ali Jamshidi & Yong Tan & Peter Wanke, 2022. "Bank efficiency estimation in China: DEA-RENNA approach," Annals of Operations Research, Springer, vol. 315(2), pages 1373-1398, August.

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