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

University of Huddersfield

Research output: Contribution to journal › Article › peer-review

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
Issue number	1
DOIs	https://doi.org/10.1016/j.intfin.2013.07.009
Publication status	Published - Oct 2013

Keywords

Capital
Chinese banks
Efficiency
Risk
SUR

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10.1016/j.intfin.2013.07.009

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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.

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KW - Efficiency

KW - Risk

KW - SUR

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Risk, capital and efficiency in Chinese banking

Abstract

Keywords

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