Opening the Black Box on bank efficiency in China: does economic freedom matter?

The paper provides, for the first time, empirical evidence on the impact of economic freedom on bank efficiency in a developing economy. We employ the Data Envelopment Analysis method to compute the efficiency of the Chinese banking sector during 2000-2008. The empirical findings indicate that the i...

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Main Authors:	Sufian, Fadzlan, Habibullah, Muzafar Shah
Format:	Article
Language:	English
Published:	Routledge 2011
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/1/sufian_%26_habibullah_%282011%29.pdf

id	iium-5196
recordtype	eprints
spelling	iium-51962013-06-25T01:20:03Z http://irep.iium.edu.my/5196/ Opening the Black Box on bank efficiency in China: does economic freedom matter? Sufian, Fadzlan Habibullah, Muzafar Shah HG1501 Banking The paper provides, for the first time, empirical evidence on the impact of economic freedom on bank efficiency in a developing economy. We employ the Data Envelopment Analysis method to compute the efficiency of the Chinese banking sector during 2000-2008. The empirical findings indicate that the inefficiency of the Chinese banking sector stems largely from scale rather than pure technical. By examining different dimensions of economic freedom, we find that not all are equally regressive on bank efficiency. We find that the impact of business freedom to be positive, implying that higher (lower) freedom for entrepreneurs to start businesses increases (reduces) bank efficiency. Similarly, monetary freedom is positively related to bank efficiency levels, indicating the importance of a stable and reliable monetary policy to business environment. On the other hand, the impact of financial freedom is negative, implying that higher (lower) financial freedom reduces (increases) the efficiency of banks operating in the Chinese banking sector. Routledge 2011-09 Article PeerReviewed application/pdf en http://irep.iium.edu.my/5196/1/sufian_%26_habibullah_%282011%29.pdf Sufian, Fadzlan and Habibullah, Muzafar Shah (2011) Opening the Black Box on bank efficiency in China: does economic freedom matter? Global Economic Review, 40 (3). pp. 269-298. ISSN 1226-508X(P),1744-3873(O) http://www.tandf.co.uk/journals/titles/1226508x.asp DOI:10.1080/1226508X.2011.601633
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Sufian, Fadzlan Habibullah, Muzafar Shah Opening the Black Box on bank efficiency in China: does economic freedom matter?
description	The paper provides, for the first time, empirical evidence on the impact of economic freedom on bank efficiency in a developing economy. We employ the Data Envelopment Analysis method to compute the efficiency of the Chinese banking sector during 2000-2008. The empirical findings indicate that the inefficiency of the Chinese banking sector stems largely from scale rather than pure technical. By examining different dimensions of economic freedom, we find that not all are equally regressive on bank efficiency. We find that the impact of business freedom to be positive, implying that higher (lower) freedom for entrepreneurs to start businesses increases (reduces) bank efficiency. Similarly, monetary freedom is positively related to bank efficiency levels, indicating the importance of a stable and reliable monetary policy to business environment. On the other hand, the impact of financial freedom is negative, implying that higher (lower) financial freedom reduces (increases) the efficiency of banks operating in the Chinese banking sector.
format	Article
author	Sufian, Fadzlan Habibullah, Muzafar Shah
author_facet	Sufian, Fadzlan Habibullah, Muzafar Shah
author_sort	Sufian, Fadzlan
title	Opening the Black Box on bank efficiency in China: does economic freedom matter?
title_short	Opening the Black Box on bank efficiency in China: does economic freedom matter?
title_full	Opening the Black Box on bank efficiency in China: does economic freedom matter?
title_fullStr	Opening the Black Box on bank efficiency in China: does economic freedom matter?
title_full_unstemmed	Opening the Black Box on bank efficiency in China: does economic freedom matter?
title_sort	opening the black box on bank efficiency in china: does economic freedom matter?
publisher	Routledge
publishDate	2011
url	http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/ http://irep.iium.edu.my/5196/1/sufian_%26_habibullah_%282011%29.pdf
first_indexed	2023-09-18T20:13:41Z
last_indexed	2023-09-18T20:13:41Z
_version_	1777407645275127808

Opening the Black Box on bank efficiency in China: does economic freedom matter?

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