Bank’s Profit Efficiency Under China Economic

Asst. Prof. Dr. Woon Kan Yap & Prof. Dr. Fadzlan Sufian

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Type :	Academic Journal
Main Author :	Asst. Prof. Dr. Woon Kan Yap & Prof. Dr. Fadzlan Sufian
Title :	Bank’s Profit Efficiency Under China Economic
Varying Form of Title :	Journal The Chinese Economy , (2018), Vol 51, Issue 1, Pages 20-44
Content Type :	still image (rdacontent)
Media Type :	computer (rdamedia)
Carrier Type :	online resource (rdacarrier)

Publisher :	Journal The Chinese Economy
Year of Publication :	2018
Summary :	This present study argues that economic freedom is a necessary antecedent to China’s structural economic rebalancing. Therefore, using an index of economic freedom, it seeks to examine the implications of economic rebalancing on banks’ profit efficiency following a freer Chinese economy. Our dataset includes an unbalanced panel of 514 annual observations from 138 commercial banks that operated from 2007 to 2013. This study found evidence that higher freedom index of government spending, which denotes contraction of government expenditure, will result in lower profit efficiency. However, on a more granular level, the reduction of efficiency does not apply to state-connected banks, which are seen to be more profit efficient. On the other hand, the reduction of profit efficiency that afflicts other commercial banks that are less connected to the state authority can be mitigated by the increased aggregate demand from the private sector, following greater fiscal freedom and trade freedom through cutback on the tax rates and lower trade barriers, respectively.
Corporate Name :	UNIRAZAK Library
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