Abstract
In the era of internet finance, the scholars and practitioners around the world are paying attention to how to enhance the competitiveness of commercial banks by choosing the appropriate growth pattern of business performance. This paper uses empirical research to discuss the growth model of business performance within 16 listed commercial banks in China by full-combination DEA-PCA model. We find that there are significant differences on the performance evaluation of each listed bank due to whether they consider internet factor or not. Furthermore, we apply PCA model which is based on the result of full-combination DEA model to classify the growth pattern of business performance into “Internet Business Oriented” which enhances performance by internet finance innovation and “Traditional Business Oriented” which maintains performance by traditional banking business. According to the performance of each listed bank in the PCA analysis chart, we classify these banks further into four groups: “Emphasis on internet business”, “Emphasis on traditional business”, “Emphasis on internet business with overburdened traditional business” and “Balance between internet business and traditional business”. Each group of banks has its own strength and weakness. At last, according to the characteristics of different bank groups, we put forward the corresponding efficiency strategy recommendations.
Highlights
We apply Principal Component Analysis (PCA) model which is based on the result of full-combination data envelopment analysis (DEA) model to classify the growth pattern of business performance into “Internet Business Oriented” which enhances performance by internet finance innovation and “Traditional Business Oriented” which maintains performance by traditional banking business
Qin et al 1034 indicators which are impacting commercial bank’s efficiency by incorporating the financial information and non-financial information; Secondly, we take new ideas and methods to evaluate the efficiency of commercial banks, namely: the use of a combination of full-DEA-PCA model to evaluate the efficiency of the listed banks; we found that the current efficiency growth pattern of China’s commercial banks can be divided into “network service oriented” and “traditional business oriented”
We used full-combination of DEA-PCA which considered financial variables and non-financial variables to analyze the efficiency growth model of China’s listed banks under the internet finance age and the study showed that the listed bank performance evaluation of internet factor was obvious different
Summary
Qin et al 1034 indicators which are impacting commercial bank’s efficiency by incorporating the financial information and non-financial information; Secondly, we take new ideas and methods to evaluate the efficiency of commercial banks, namely: the use of a combination of full-DEA-PCA model to evaluate the efficiency of the listed banks; we found that the current efficiency growth pattern of China’s commercial banks can be divided into “network service oriented” and “traditional business oriented”. According to the performance of listed banks in the principal component analysis graph, China’s listed banks will be further divided into four groups to analyze the efficiency growth path, so we propose policy recommendations to enhance the operation efficiency of each group based on its characteristic. The rest of the paper is organized as follows: The second part is literature review, which sorts out and analyzes the efficiency of commercial bank’s research methods, the index system and conclusions; The third part is model design, which explains the features and principles of the model chosen and the reason for the model; The fourth part is data and variable declaration, which explains the selected sample, data sources and empirical model index system; The fifth part is empirical analysis, which puts the sample data into the model to calculate and analyze the result; The sixth part is the conclusion, which summarizes the finding, proposes measures, recommendations and outlook
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