Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency
This study examines the effects of credit market freedom on the dynamics of Chinese banks’ output reallocation through the intermediation of cost X-inefficiency. We find two distinct regimes that underpin the mechanism of foreign banks and domestic banks respectively. Credit market freedom is found...
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| Format: | Article |
| Language: | English |
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Central University of Finance and Economics
2019
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| Online Access: | http://psasir.upm.edu.my/id/eprint/79583/1/Effects%20of%20credit%20market%20freedom%20on%20output%20reallocation%20.pdf |
| _version_ | 1796980639434539008 |
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| author | Yap, Woon Kan Law, Siong Hock Abdul Ghani, Judhiana |
| author_facet | Yap, Woon Kan Law, Siong Hock Abdul Ghani, Judhiana |
| author_sort | Yap, Woon Kan |
| collection | UPM |
| description | This study examines the effects of credit market freedom on the dynamics of Chinese banks’ output reallocation through the intermediation of cost X-inefficiency. We find two distinct regimes that underpin the mechanism of foreign banks and domestic banks respectively. Credit market freedom is found to significantly foster cost X-efficiency among the foreign banks, which subsequently lead to marginally more efficient allocation of outputs with efficient foreign banks gain market shares at the expense of those inefficient ones. On the other hand, the same circuit of effects does not apply to the domestic banks. Therefore, arguably foreign banks attach more importance to efficiency, while domestic banks leech on to state protection for their respective existence. |
| first_indexed | 2024-03-06T10:26:01Z |
| format | Article |
| id | upm.eprints-79583 |
| institution | Universiti Putra Malaysia |
| language | English |
| last_indexed | 2024-03-06T10:26:01Z |
| publishDate | 2019 |
| publisher | Central University of Finance and Economics |
| record_format | dspace |
| spelling | upm.eprints-795832021-06-30T04:02:15Z http://psasir.upm.edu.my/id/eprint/79583/ Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency Yap, Woon Kan Law, Siong Hock Abdul Ghani, Judhiana This study examines the effects of credit market freedom on the dynamics of Chinese banks’ output reallocation through the intermediation of cost X-inefficiency. We find two distinct regimes that underpin the mechanism of foreign banks and domestic banks respectively. Credit market freedom is found to significantly foster cost X-efficiency among the foreign banks, which subsequently lead to marginally more efficient allocation of outputs with efficient foreign banks gain market shares at the expense of those inefficient ones. On the other hand, the same circuit of effects does not apply to the domestic banks. Therefore, arguably foreign banks attach more importance to efficiency, while domestic banks leech on to state protection for their respective existence. Central University of Finance and Economics 2019 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/79583/1/Effects%20of%20credit%20market%20freedom%20on%20output%20reallocation%20.pdf Yap, Woon Kan and Law, Siong Hock and Abdul Ghani, Judhiana (2019) Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency. Annals of Economics and Finance, 20 (2). pp. 691-720. ISSN 1529-7373 http://aeconf.com/nov2019.htm |
| spellingShingle | Yap, Woon Kan Law, Siong Hock Abdul Ghani, Judhiana Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title | Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title_full | Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title_fullStr | Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title_full_unstemmed | Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title_short | Effects of credit market freedom on output reallocation in China’s banking sector through the intermediation of cost X-inefficiency |
| title_sort | effects of credit market freedom on output reallocation in china s banking sector through the intermediation of cost x inefficiency |
| url | http://psasir.upm.edu.my/id/eprint/79583/1/Effects%20of%20credit%20market%20freedom%20on%20output%20reallocation%20.pdf |
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