Abstract
This paper introduces comprehensive factors to study their influence on shareholder value efficiency of China’s four state-owned commercial banks and 10 joint-stock commercial banks. An empirical analysis found that capacity to expand income, liquidity risk, asset size, loan growth, concentration in the banking industry, GDP per capita significantly enhance the ability to create value for shareholders of the commercial banks, and operational risk, leverage ratio result in significant adverse effects. Finally proposals are offered to enhance shareholder value efficiency of Chinese commercial banks.
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Notes
- 1.
This paper uses economic value added (EVA) as the measure of value creation by a commercial bank for its shareholders, and the use of the stochastic frontier approach (SFA) measures the shareholder value efficiency of Chinese commercial banks.
- 2.
In this paper, the SFA method (stochastic frontier approach) estimates of revenue, cost and profit efficiency of Chinese commercial banks.
- 3.
In accordance with Basel Agreement 2006: operational risk in Basic Indicator Approach.
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Acknowledgments
The authors would like to thank Hejin Zhang for very helpful comments. The authors also wish to thank the referees for insightful and helpful comments particularly with regard to various estimation and data issues. All errors, of course, rest with the authors.
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Zhao, Ch., Xu, Yy. (2013). The Determinants of Shareholder Value Efficiency in Chinese Commercial Banks. In: Qi, E., Shen, J., Dou, R. (eds) The 19th International Conference on Industrial Engineering and Engineering Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-38442-4_25
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