Summary:
The commercial banking system in China has experienced a series of reforms since the launch of the opening-up policy. With the fast pace of marketization, competition in China's commercial banking industry has inevitably intensified, which has been a major trend over the past decade. The challenges facing this ever-evolving industry therefore lie in two aspects: how much has the market-oriented transformation affected the industry, and more essentially, can competition improve efficiency? While most research has focused on the idiosyncratic characteristics of banks, this study provides additional information by looking at the role of external conditions and factors from a macro-economic perspective, thus being more policy relevant. The banks of interest are regional commercial banks, and central to our research question is the efficiency of commercial city banks. Although these banks are still much smaller in terms of market share than the larger national banks, their fast development, increasingly important role and potentially significant impact are not negligible. Given their large numbers, collectively they have the ability to affect the stability of the whole banking system, which should draw sufficient attention from regulators and policymakers. It is therefore of critical importance to analyze the efficiency problem of these banks, to provide further evidence not only for a retrospective view of the extant banking sector reforms, but more importantly for the construction of future regional financial development policies. Our methodology comprises two main parts. First, we use stochastic frontier analysis (SFA) to estimate the operational efficiency of each bank; we then construct an econometric model to examine the impact of regional competition on bank operational efficiency. The bank information in our study is collected from the annual reports of the banks and the BANKSCOPE database. Given that our sample is composed of city and rural commercial banks whose number was relatively small before 2003, we choose the sample period starting in 2004 and ending in 2015, and construct an unbalanced panel accordingly. Using the China Banking Regulatory Commission (CBRC) authorization information of bank branches, we construct a city level competition measure. The empirical results show that competition can enhance the operational efficiency of regional commercial banks, although the positive impact differs across bank types. Moreover, the impact of competition on efficiency is nonlinear. Over-competition can induce negative effects. A series of robustness checks corroborate our conclusion. In addition, we test for the moderating effects of cross-regional operation by these banks on the relationship between competition and efficiency. Our results have clear policy implications. First, a healthy financial system and ordered competition are key to improving bank operational efficiency; clear regional disparities in terms of development imply that regional-specific policies are required. Second, the impact of regional banking development differs across bank types, which provides empirical evidence to authorities for optimizing the banking structure. Third, both over-competition and over-monopolistic market conditions in the banking sector are shown to be harmful. Regulators should aim for an optimal level of competition and ensure a healthy market structure for the banking sector. In general, this study makes the following innovations and contributions to the literature. (1) Using the CBRC branch authorization certificate information to construct a regional banking competition measure is novel. The data cover all information over time and provide comprehensive information objectively, which minimizes the possible influence of undesirable endogeneity. (2) The sample period of this study was especially important in the development of China's banking system. It not only covers the development of city and rural commercial banks from embryo to prosperity, but also highlights the critical transitions from local to cross-regional operation, thus giving us a unique and interesting perspective. (3) Methodologically, when testing for the typical competition–efficiency relationship, the transmission mechanisms are also analyzed and confirmed via a number robustness checks and a mediator effect model.
张大永, 张志伟. 竞争与效率——基于我国区域性商业银行的实证研究[J]. 金融研究, 2019, 466(4): 111-129.
ZHANG Dayong, ZHANG Zhiwei. Competition and Efficiency: An Empirical Study Based on Regional Commercial Banks in China. Journal of Financial Research, 2019, 466(4): 111-129.
[1]蔡竞和董艳,2016,《银行业竞争与企业创新——来自中国工业企业的经验证据》,《金融研究》第11期,第96~111页。 [2]蔡卫星,2016,《分支机构市场准入放松、跨区域经营与银行绩效》,《金融研究》第6期,第127~141页。 [3]程茂勇和赵红,2011,《市场势力对银行效率影响分析——来自我国商业银行的经验数据》,《数量经济技术经济研究》第10期,第78~91页。 [4]黄隽和汤珂,2008,《商业银行竞争、效率及其关系研究—以韩国、中国台湾和中国大陆为例》,《中国社会科学》第1期,第69~86页。 [5]毛洪涛、何熙琼和张福华,2013,《转型经济体制下我国商业银行改革对银行效率的影响——来自1999-2010年的经验证据》,《金融研究》第12期,第16~29页。 [6]申创和赵胜民,2017a,《市场竞争度与银行非利息收入关系研究》,《经济评论》第1期,第53~67页。 [7]申创和赵胜民,2017b,《市场竞争度、非利息业务对商业银行效率的影响研究》,《数量经济技术经济研究》第9期,第145~160页。 [8]申广军、陈斌开和杨汝岱,2016,《减税能否提振中国经济?——基于中国增值税改革的实证研究》,《经济研究》第11期,第70~82页。 [9]王擎、吴玮和黄娟,2012,《 城市商业银行跨区域经营:信贷扩张、风险水平及银行绩效》,《金融研究》第1期,第141~153页。 [10]温忠麟、张雷、侯杰泰和刘红云,2004,《中介效应检验程序及其应用》,《心理学报》第 5 期,第 614~620页。 [11]杨天宇和钟宇平,2013,《中国银行业的集中度、竞争度与银行风险》,《金融研究》第1期,第122~134页。 [12]尹志超、吴雨和林富美, 2014,《市场化进程与商业银行风险——基于中国商业银行微观数据的实证研究》,《金融研究》第1期,第124~138页。 [13]张健华、王鹏和冯根福,2016,《银行业结构与中国全要素生产率——基于商业银行分省数据和双向距离函数的再检验》,《经济研究》第11期,第114~128页。 [14]张杰、郑文平和新夫,2017,《中国的银行管制放松、结构性竞争和企业创新》,《中国工业经济》第10期,第118~136页。 [15]祝继高、李天时和尤可畅,2017,《房地产价格波动与商业银行贷款损失准备——基于中国城市商业银行的实证研究》,《金融研究》第9期,第83~98页。 [16]Ariss, R.T. 2010. “On the Implications of Market Power in Banking: Evidence from Developing Countries”. Journal of Banking and Finance, 34(4):765~775. [17]Bain, J.S. 1951. “Relation of Profit Rate to Industry Concentration: American Manufacturing, 1936-1940”. Quarterly Journal of Economics, 65(4):293~324. [18]Berger, A.N. 1995. “The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses”. Journal of Money, Credit and Banking, 27(2):404~431. [19]Berger, A.N. and T.H. Hannan. 1998. “The Efficiency Cost of Market Power in the Banking Industry: A Test of the "Quiet Life" and Related Hypotheses”. The Review of Economics and Statistics, 80(3):454~465. [20]Berger, A.N., I. Hasan, and M. Zhou. 2009. “Bank Ownership and Efficiency in China: What will Happen in the World's Largest Nation?”. Journal of Banking and Finance, 33(1):113~130. [21]Carbo, S., D.B. Humphrey, J. Maudos, and P. Molyneux. 2009. “Cross-country Comparisons of Competition and Pricing Power in European banking”. Journal of International Money and Finance, 28(1):115~134. [22]Chan, S., E.H.Y. Koh, F. Zainir, and C. Yong. 2015. “Market Structure, Institutional Framework and Bank Efficiency in ASEAN 5”. Journal of Economics and Business, 82:84~112. [23]Chong, T.T.L., L. Lu, and S. Ongena. 2013. “Does Banking Competition Alleviate or Worsen Credit Constraints Faced by Small- and Medium-sized Enterprises? Evidence from China”. Journal of Banking and Finance, 37(9):3412~3424. [24]Demsetz, H. 1973. “Industry Structure, Market Rivalry, and Public Policy”. The Journal of Law and Economics, 16(1):1~9. [25]Fu, X. and S. Heffernan. 2009. “The Effects of Reform on China’s Bank Structure and Performance”. Journal of Banking and Finance, 33(1):39~52. [26]Fungacova, Z., P. Pessarossi, and L. Weill. 2013. “Is Bank Competition Detrimental to Efficiency? Evidence from China”. China Economic Review, 27:121~134. [27]Greene, W.H. 2005. “Reconsidering Heterogeneity in Panel Data Estimators of the Stochastic Frontier Model”. Journal of Econometrics, 126(2):269~303. [28]Hauswald, R.B.H. and R. Marquez. 2006. “Competition and Strategic Information Acquisition in Credit Markets”. Review of Financial Studies, 19(3):967~1000. [29]Hou, X., Q. Wang, and Q. Zhang. 2014. “Market Structure, Risk taking, and the Efficiency of Chinese Commercial Banks”. Emerging Markets Review, 20:75~88. [30]Jiang, C., S. Yao, and G. Feng. 2013. “Bank Ownership, Privatization, and Performance: Evidence from a Transition Country”. Journal of Banking and Finance, 37(9):3364~3372. [31]Jiang, C., S. Yao, and Z. Zhang. 2009. “The Effects of Governance Changes on Bank Efficiency in China: A Stochastic Distance Function Approach”. China Economic Review, 20(4):717~731. [32]Klein, M.A. 1971. “A Theory of the Banking Firm”. Journal of Money, Credit and Banking, 3(2):205. [33]Marquez, R. 2002. “Competition, Adverse Selection, and Information Dispersion in the Banking Industry”. Review of Financial Studies, 15(3):901~926. [34]Maudos, J. and J.F. De Guevara. 2007. “The Cost of Market Power in Banking: Social Welfare Loss vs. Cost Inefficiency”. Journal of Banking and Finance, 31(7):2103~2125. [35]Mehran, H. and A.V. Thakor. 2011. “Bank Capital and Value in the Cross Section”. Review of Financial Studies, 24(4):1019~1067. [36]Petersen, M.A. and R.G. Rajan. 1995. “The Effect of Credit Market Competition on Lending Relationships”. Quarterly Journal of Economics, 110(2):407~443. [37]Shaban, M. and G.A. James. 2017. “The Effects of Ownership Change on Bank Performance and Risk Exposure: Evidence from Indonesia”. Journal of Banking and Finance, 88:483~497. [38]Smirlock, M. 1985. “Evidence on the (Non) Relationship between Concentration and Profitability in Banking”. Journal of Money, Credit and Banking, 17(1):69~83. [39]Sobel, M.E. 1982. “Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models”. Sociological Methodology, 13:290~312. [40]Sun, J., K. Harimaya, and N. Yamori. 2013. “Regional Economic Development, Strategic Investors, and Efficiency of Chinese City Commercial Banks”. Journal of Banking and Finance, 37(5):1602–1611. [41]Tabak, B.M., D.M. Fazio, and D.O. Cajueiro. 2013. “Systemically Important Banks and Financial Stability: The Case of Latin America”. Journal of Banking and Finance, 37(10):3855~3866. [42]Zhang, D., J. Cai, D.G. Dickinson, and A.M. Kutan. 2016. “Non-performing Loans, Moral hazard and Regulation of the Chinese Commercial Banking System”. Journal of Banking and Finance, 63(2):48~60. [43]Zhang, D., J. Cai, J. Liu, and A.M. Kutan. 2018. “Real Estate Investments and Financial Stability: Evidence from Regional Commercial Banks in China”. European Journal of Finance, 24(16):1388~1408.