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Economies of Scale in Chinese Commercial Banking Sector

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DOI: 10.23977/eeim.2018.032


Jian Yao

Corresponding Author

Jian Yao


With the development of market economy, finance has become an important part of modern economy. A stable and efficient financial system is an important condition for the healthy and harmonious development of a country's economy. As an important part of the financial system, banks play an important role in social and economic life. This paper used translog cost function to measure the economies of scale among Chinese commercial banking sector with 14 Chinese commercial banks’ data during 2001 to 2014. The result indicated that economies of scale widely existing among Chinese commercial banking sector, however, medium commercial banks have stronger economies of scale than large banks and small banks. What’s more, this paper also approved previous studies which indicated that technology can help banks’ managers to reduce their cost. And those findings of this paper also provided diverse reasonable suggestions for new private banks’ development in the future.


Economies of Scale, Commercial Banking, Sur

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