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The Global Financial Crisis, Fiscal Stimulus Package and the Chinese Banking Sector — A Pre- and Post-Efficiency Analysis

Author

Listed:
  • Dong Xiang

    (School of Management, Qilu University of Technology (Shandong Academy of Sciences), China)

  • Parmendra Sharma

    (Griffith University, Australia)

  • Yuming Zhang

    (School of Management, Shandong University, China)

Abstract

This study is the first to examine the impact of two recent key events on technical, cost and profit efficiencies of Chinese commercial banks — the 2007 Global Financial Crisis (GFC) and the subsequent Chinese Government’s 2009 fiscal stimulus package. Stochastic frontier analysis together with univariate and multivariate tests are used on a sample of 143 banks, including the big five, joint stock, city, rural and foreign, over the 2006–2013 period. Overall, there is substantial scope for improvement — cost efficiency could improve by up to 50%; technical and profit efficiencies by up to 30%. The effect of the crisis and the stimulus package on various overall and segment efficiencies is, at best, inconsistent and inconclusive.

Suggested Citation

  • Dong Xiang & Parmendra Sharma & Yuming Zhang, 2019. "The Global Financial Crisis, Fiscal Stimulus Package and the Chinese Banking Sector — A Pre- and Post-Efficiency Analysis," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 22(02), pages 1-43, June.
    • Handle: RePEc:wsi:rpbfmp:v:22:y:2019:i:02:n:s0219091519500115
    DOI: 10.1142/S0219091519500115
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