Risk management and managerial efficiency in Chinese banks: A network DEA framework

Research output: Journal PublicationArticlepeer-review

124 Citations (Scopus)

Abstract

Risk management in Chinese banks has traditionally been the Cinderella of its internal functions. Political stricture and developmental imperative have often overridden standard practice of risk management resulting in large non-performing loan (NPL) ratios. The training and practice of risk managers remain second class compared with foreign banks operating in China. This paper surveys Chinese bank risk managers and constructs metrics of risk management practice and risk management organisation. The metrics are used as intermediate inputs in a Network DEA framework to produce a measure of income efficiency. A statistical test is carried out to assess the importance of the risk metrics in evaluating bank income efficiency.

Original languageEnglish
Pages (from-to)207-215
Number of pages9
JournalOmega
Volume41
Issue number2
DOIs
Publication statusPublished - Apr 2013
Externally publishedYes

Keywords

  • Managerial efficiency
  • Network DEA
  • Risk management
  • Risk organisation

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Information Systems and Management

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