An Empirical Study of Efficiency of Chinese Commercial Banks Based on Slacks-Based Measure

This study employs non-oriented slacks-based measure (SBM) with undesirable output under variable returns to the scale to analyze efficiency of 18 Chinese commercial banks, including five state-owned banks and thirteen joint-stock banks. This finding is that average efficiency of the state-owned banks is greater than that of the joint-stock banks for 2006-2010. However, average efficiency of the joint-stock banks exceeds slightly that of the state-owned banks after 2010. At the same time, this study shows how many inputs or outputs should be reduced or increased to achieve the optimal values.