Risk, capital and efficiency in Chinese Banking

Yong Tan; Christos Floros

doi:10.1016/j.intfin.2013.07.009

Risk, capital and efficiency in Chinese Banking

Yong Tan, Christos Floros

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Abstract

We assess the relationship between bank efficiency, risk and capital for a sample of Chinese commercial banks employing three efficiency indexes and four risk indicators under a three stage least square method in a panel data framework. The empirical evidence suggests that there is a positive and significant relationship between risk (loan-loss provision as a fraction to total loans or LLPTL) and efficiency in Chinese banking industry, while the relationship between risk (Z-score) and level of capitalization is negative and significant.

Original language	English
Pages (from-to)	378-393
Number of pages	16
Journal	Journal of International Financial Markets, Institutions and Money
Volume	26
DOIs	https://doi.org/10.1016/j.intfin.2013.07.009
Publication status	Published - 2013

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FLOROS_2013_pre_JIFMIM_Risk_capital_and_efficiency_in_Chinese_Banking.pdfAccepted author manuscript (Post-print), 266 KB

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title = "Risk, capital and efficiency in Chinese Banking",

abstract = "We assess the relationship between bank efficiency, risk and capital for a sample of Chinese commercial banks employing three efficiency indexes and four risk indicators under a three stage least square method in a panel data framework. The empirical evidence suggests that there is a positive and significant relationship between risk (loan-loss provision as a fraction to total loans or LLPTL) and efficiency in Chinese banking industry, while the relationship between risk (Z-score) and level of capitalization is negative and significant.",

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AU - Tan, Yong

AU - Floros, Christos

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AB - We assess the relationship between bank efficiency, risk and capital for a sample of Chinese commercial banks employing three efficiency indexes and four risk indicators under a three stage least square method in a panel data framework. The empirical evidence suggests that there is a positive and significant relationship between risk (loan-loss provision as a fraction to total loans or LLPTL) and efficiency in Chinese banking industry, while the relationship between risk (Z-score) and level of capitalization is negative and significant.

U2 - 10.1016/j.intfin.2013.07.009

DO - 10.1016/j.intfin.2013.07.009

M3 - Article

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VL - 26

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JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

ER -

Risk, capital and efficiency in Chinese Banking

Abstract

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