Chinese Commercial Banks Struggle to Achieve Economies of Scale and Efficiency
The study looked at 14 Chinese commercial banks from 1994 to 2010 to see how efficient they were in terms of costs, economies of scale, and technological progress. They found that stock-holding banks were slightly better at cost efficiency and technological progress compared to large banks. Overall, Chinese banks struggle to achieve economies of scale by increasing output. To improve efficiency, banks need to focus on reducing costs and increasing technological progress.