Efficiency and Productivity Dynamics of Chinese Listed Commercial Banks: A DEA–Malmquist Analysis
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Abstract
This study evaluates the operational efficiency and productivity dynamics of Chinese-listed commercial banks using a DEA-BCC framework and the Malmquist productivity index. Using quarterly panel data from 18 listed commercial banks in China from 2017 to 2024, the study measures and decomposes changes in Total Factor Productivity (TFP) into pure technical efficiency change (PEC), scale efficiency change (SEC), and technological change (TC). The results reveal that: (1) TFP fluctuates around unity in cycles, with technological progress the dominant driver; (2) pure technical efficiency shows considerable inter-bank variation, reflecting differences in managerial capacity and resource allocation; and (3) scale efficiency remains relatively stable across the sample period. Marked ownership heterogeneity also emerges. City commercial banks (CCBs) display the most balanced growth architecture, with PEC, SEC, and TC all exceeding unity (1.020, 1.025, and 1.015, respectively); joint-stock commercial banks (JSCBs) show balanced, moderate gains across all components (PEC = 1.008, SEC = 1.004, TC = 1.004); and state-owned commercial banks (SOBs) register the most constrained profile, with pure technical efficiency improving only marginally (PEC = 1.002). These findings imply that regulatory and governance responses should be ownership-specific: institutional reform to unlock pure technical efficiency gains in state-owned banks, differentiated technological innovation strategies for joint-stock banks, and an innovation-led transition for city commercial banks, with technological investment complemented by organizational adaptation.
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