Keywords
Bank efficiency
Heterogeneity
Submitted : 2021-09-28
Accepted : 2021-10-13
Published : 2021-10-28
Abstract
This article analyzes the impact of capital regulation on bank efficiency using panel data from 165 commercial banks in China from 2013 to 2019. The results indicate that cost efficiency changes slightly and profit efficiency fluctuates greatly. Under the pressure of capital regulation, the profit efficiency of commercial banks with sufficient capital improves, while profit efficiency of banks with insufficient capital decreases slightly, and the cost efficiency of all commercial banks increases. Based on the heterogeneity analysis of banks, it is found that the cost efficiency and profit efficiency of different types of commercial banks differ significantly in response to capital regulation.
References
He G, Ma Y, 2020, Research on the Impact of Prudential Supervision on the Operational Efficiency of China’s Commercial Banks: Based on the Perspective of Total Factor Productivity. Finance & Economics, 5: 16-29.
Chortareas GE, Girardone C, Ventouri A, 2012, Bank Supervision, Regulation, and Efficiency: Evidence from the European Union. Journal of Financial Stability, 8(4): 292-302.
Barth JR, Chen L, Yue M, et al., 2013, Do Bank Regulation, Supervision and Monitoring Enhance or Impede Bank Efficiency?. SSRN Electronic Journal, 37(8): 2879-2892.
Ariff M, Luc C, 2008, Cost and Profit Efficiency of Chinese Banks: A Non-Parametric Analysis. China Economic Review, 19(2): 260-273.
Pasiouras F, Tanna S, Zopounidis C, 2009, The Impact of Banking Regulations on Banks’ Cost and Profit Efficiency: Cross-Country Evidence. International Review of Financial Analysis, 18(5): 294-302.
Li Y, Wang MC, 2012, Capital Regulation?Monetary Policy and Asymmetric Effects of Commercial Bank’s Efficiency. Economic Review, 2: 116-126.
Jacques K, Nigro P, 1997, Risk-Based Capital, Portfolio Risk, and Bank Capital: A Simultaneous Equations Approach. Journal of Economics and Business, 49(6): 533-547.
Zhou J, Tao SG, 2019, Does Structural Monetary Policy Affect the Efficiency of Chinese Commercial Banks? Research Based on the Channel of Bank Risk-Taking. China Economic Studies, 3: 25-39.