BANKING SYSTEM EFFICIENCY AND CHINESE REGIONAL ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS BASED ON BANK’S MICRO-EFFICIENCY

Thesis Abstract

Abstract
This research study investigates the relationship between banking system efficiency and Chinese regional economic growth through an empirical analysis focused on bank's micro-efficiency. The efficiency of the banking system plays a crucial role in the overall economic development of a region, and understanding this relationship is essential for policymakers and stakeholders. In the context of China, the banking sector's efficiency has a significant impact on the regional economic growth due to the dominance of banks in the financial system. Using data from Chinese commercial banks, this study employs the Data Envelopment Analysis (DEA) method to measure bank efficiency at the micro-level. The DEA approach allows for the assessment of various inputs and outputs to determine the efficiency levels of individual banks, providing a comprehensive analysis of the banking system. Furthermore, the study utilizes panel data analysis techniques to examine the relationship between bank efficiency and regional economic growth across different provinces in China. The findings of this research reveal a positive correlation between banking system efficiency and regional economic growth in China. Regions with more efficient banks tend to experience higher levels of economic growth, indicating the importance of a well-functioning banking system in driving economic development. Additionally, the study identifies specific factors that contribute to bank efficiency, such as capital adequacy, asset quality, management quality, and earnings performance. The results suggest that improving bank efficiency can have a significant impact on stimulating economic growth at the regional level in China. Policymakers can use these findings to implement strategies that enhance the efficiency of the banking sector, ultimately fostering sustainable economic development across different regions. By focusing on enhancing key aspects of bank operations and management, such as risk management practices and technology adoption, banks can improve their overall efficiency and contribute to the growth of the regional economy. Overall, this research underscores the importance of banking system efficiency in driving regional economic growth in China. By understanding the factors that influence bank efficiency and its impact on economic development, policymakers can formulate effective policies to promote a more efficient and resilient banking sector. This study provides valuable insights for policymakers, regulators, and industry stakeholders seeking to enhance the efficiency of the banking system and support sustainable economic growth in China's diverse regions.