Temporal and spatial heterogeneity of resource misallocation in Chinese banks and its influential factors

Abstract

This study measures the degree of resource misallocation in Chinese banks and investigates its temporal and spatial variations. Our findings suggest that resource misallocation is prevalent in Chinese banks. The primary source of this misallocation is inter-regional disparities, but both regional imbalances and the misallocation of resources have decreased over time. Multiple factors contribute to the heterogeneity of resource misallocation within banks. While financial development, human capital, and ownership structures exacerbate the misallocation, fiscal decentralization, financial openness, industrial structure, and urbanization levels alleviate it. However, the intensity and direction of these effects differ across regions, leading to visible spatial disparities.