Exploring the sources of financial performance in Chinese banks: A comparative analysis of different types of banks |
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| Institution: | 1. School of Economics, Jinan University, No. 601, West of Huangpu Avenue, Tianhe District, Guangzhou, Guangdong 510632, China;2. Business School, University of Western Australia, 35 Stirling Highway, Crawley, Perth, Western Australia 6009, Australia;1. LUISS G.Carli, Dipartimento di Economia e Finanza, Viale Romania 32, Roma, Italy;2. Università di Genova, Dipartimento di Economia, Via Vivaldi 2, 16126 Genova, Italy;1. Département des sciences administratives, Université du Québec (Outaouais), Campus St. Jérôme, 5 rue St Joseph, St Jérôme, Québec J7Z 0B7, Canada;2. Université du Québec (Montréal), École des sciences de la gestion, 315 Ste.-Catherine est, R-2915, Montréal, Québec H2X 3X2, Canada;3. Chaire d’information financière et organisationnelle (Université du Québec à Montréal), and Université du Québec en Outaouais, Canada;1. Department of Finance and Insurance, Miller College of Business, Ball State University, Muncie, IN 47306, United States;2. Department of Accounting, University of St. Thomas, St. Paul, MN 55105, United States |
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| Abstract: | Since significantly organizational difference in Chinese banks, this study makes an attempt to investigate whether there exist some differences of the financial performance and its decomposed components for Chinese banks. We employ the decomposition of profit change model introduced by Grifell-Tatje and Lovell (2015, P215) and normalized price definition of Balk (2018) to develop a normalized profit change decomposition model which can well deal with the firms’ scale difference. This model also decomposes the normalized profit into the technical efficiency effect, technical effect, size effect, price and quantity margin effect, and price recovery effect. For the empirical evidence, we find that although there is an increase of profit gains, the profit growth rate decline by year. Furthermore, the productivity is not the main factor to expand profits, quantity margin effect also makes peer contributions. Finally, the productivity effect and its decomposed components present different functions in different kinds of Chinese banks. |
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| Keywords: | Profit Decomposition Chinese banks Ownership Productivity Financial performance |
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