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

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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.

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Notes

  1. http://www.gov.cn/xinwen/2019-01/12/content_5357208.htm.

  2. http://mini.eastday.com/a/180702171706863.html.

  3. https://news.china.com/socialgd/10000169/20190110/34953653.html.

  4. http://news.ifeng.com/a/20181125/60172893_0.shtml.

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Acknowledgements

This research is supported by National Natural Science Foundation of China (No. 71971203, 71571173, 71631006), the Soft Science Research Program of Anhui Province (201806a02020033), the Fundamental Research Funds for the Central Universities (No. WK2040160029) and Foundation for Innovative Research Groups of the National Natural Science Foundation of China (No. 71921001).

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  1. School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei, 230026, Anhui, People’s Republic of China

    Xiaohong Liu, Feng Yang & Jie Wu

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  1. Xiaohong Liu
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  2. Feng Yang
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Correspondence to Jie Wu.

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Appendix

Appendix

See Table 8.

Table 8 The full names and abbreviations of all CCBs
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Liu, X., Yang, F. & Wu, J. DEA considering technological heterogeneity and intermediate output target setting: the performance analysis of Chinese commercial banks. Ann Oper Res 291, 605–626 (2020). https://doi.org/10.1007/s10479-019-03413-w

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