Nonperforming loans and productivity in Chinese Banks, 1997-2006

Kent Matthews; Xu Zhang; Jianguang Guo

doi:10.2753/CES1097-1475420202

Nonperforming loans and productivity in Chinese Banks, 1997-2006

Kent Matthews, Xu Zhang, Jianguang Guo

Research output: Journal Publication › Article › peer-review

25 Citations (Scopus)

Abstract

A bootstrap method for Malmquist index estimates of productivity growth is constructed with appropriate confidence intervals. This paper adjusts for the quality of the output by accounting for the nonperforming loans (NPLs) on balance sheets and tests the robustness of the results by examining alternative sets of outputs. The productivity growth of state-owned banks and joint-stock banks is compared, and the determinants are evaluated. It was found that the average productivity of Chinese banks improved modestly over this period. Adjusting for the quality of loans by treating NPLs as an undesirable output, the average productivity growth of the state-owned banks was zero or negative, while the productivity of the joint-stock banks was markedly higher.

Original language	English
Pages (from-to)	30-47
Number of pages	18
Journal	Chinese Economy
Volume	42
Issue number	2
DOIs	https://doi.org/10.2753/CES1097-1475420202
Publication status	Published - 1 Mar 2009
Externally published	Yes

ASJC Scopus subject areas

General Economics,Econometrics and Finance

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.2753/CES1097-1475420202

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abstract = "A bootstrap method for Malmquist index estimates of productivity growth is constructed with appropriate confidence intervals. This paper adjusts for the quality of the output by accounting for the nonperforming loans (NPLs) on balance sheets and tests the robustness of the results by examining alternative sets of outputs. The productivity growth of state-owned banks and joint-stock banks is compared, and the determinants are evaluated. It was found that the average productivity of Chinese banks improved modestly over this period. Adjusting for the quality of loans by treating NPLs as an undesirable output, the average productivity growth of the state-owned banks was zero or negative, while the productivity of the joint-stock banks was markedly higher.",

author = "Kent Matthews and Xu Zhang and Jianguang Guo",

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AB - A bootstrap method for Malmquist index estimates of productivity growth is constructed with appropriate confidence intervals. This paper adjusts for the quality of the output by accounting for the nonperforming loans (NPLs) on balance sheets and tests the robustness of the results by examining alternative sets of outputs. The productivity growth of state-owned banks and joint-stock banks is compared, and the determinants are evaluated. It was found that the average productivity of Chinese banks improved modestly over this period. Adjusting for the quality of loans by treating NPLs as an undesirable output, the average productivity growth of the state-owned banks was zero or negative, while the productivity of the joint-stock banks was markedly higher.

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Nonperforming loans and productivity in Chinese Banks, 1997-2006

Abstract

ASJC Scopus subject areas

UN SDGs

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