Abstract
This article examines the efficiency performance and productivity change of China’s Big four state-owned commercial banks and to test how the banks react to the bank reform period from 1990 to 2008. The empirical analysis utilizes the data envelopment analysis to estimate the technical and scale efficiency of the Big four state-owned banks on a panel basis. The result shows that the technical efficiency, scale efficiency and productivity change of the Big four state-owned banks reacted positively over the reform period from 1990 to 2008. The result also shows that too much protection, support and intervention from the Chinese government results in a lack of motivation to innovate and develop new financial products and services. The article concludes that the Chinese government should let the banks make the lending decision base on the commercial principles.
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