TY - JOUR

T1 - Financial innovation system reform in Chinese banking: The impact on bank profitability

AU - Shen, Bingbing

AU - Xu, Zhenpeng

N1 - Establishing a national science and technology innovation system in a socialist market economy is impossible without financial support from the financial sector, so commercial banks, which dominate the financial sector, should be an important part of the science and technology innovation system. However, both theorists and practitioners pay much attention to the creation of new financial sectors, that is, institutions and venture capital systems, and their importance for the science and technology innovation system, and rarely talk about the status and role of commercial banks in the science and technology innovation system [1].

PY - 2023/4/14

Y1 - 2023/4/14

N2 - China's innovation capacity has been growing rapidly in recent years, but the country still needs to improve its national innovation system and form a financial services system that is compatible with the full life cycle of science and innovation companies. Looking back at China's history of financial development, the choice and feedback of commercial banks on regulatory policy has been an important factor influencing regulatory policy. With China's financial market gradually opening up to the outside world and an influx of foreign commercial banks, Chinese commercial banks are facing increasing competitive pressure. Improving the profitability of Chinese commercial banks to enhance their competitiveness has become a key to financial innovation and reform in the Chinese banking sector. Therefore, this study investigates the profitability and profit efficiency levels of Chinese banking industry over the period 2012-2020 using stochastic frontier approach. The empirical analysis leads to the following conclusions: The result is that national joint-stock commercial banks and city commercial banks, which have been given more management freedom, are trying to adapt to the dynamically changing environment and show an increase in efficiency. State-owned commercial banks maintain high levels of efficiency, but are more conservative to change. Agricultural commercial banks, for the most part, are showing efficiency gains, with no strong deterioration shown. Keywords: national innovation system, banking system, profitability, central bank, return on assets

AB - China's innovation capacity has been growing rapidly in recent years, but the country still needs to improve its national innovation system and form a financial services system that is compatible with the full life cycle of science and innovation companies. Looking back at China's history of financial development, the choice and feedback of commercial banks on regulatory policy has been an important factor influencing regulatory policy. With China's financial market gradually opening up to the outside world and an influx of foreign commercial banks, Chinese commercial banks are facing increasing competitive pressure. Improving the profitability of Chinese commercial banks to enhance their competitiveness has become a key to financial innovation and reform in the Chinese banking sector. Therefore, this study investigates the profitability and profit efficiency levels of Chinese banking industry over the period 2012-2020 using stochastic frontier approach. The empirical analysis leads to the following conclusions: The result is that national joint-stock commercial banks and city commercial banks, which have been given more management freedom, are trying to adapt to the dynamically changing environment and show an increase in efficiency. State-owned commercial banks maintain high levels of efficiency, but are more conservative to change. Agricultural commercial banks, for the most part, are showing efficiency gains, with no strong deterioration shown. Keywords: national innovation system, banking system, profitability, central bank, return on assets

UR - https://www.scopus.com/record/display.uri?eid=2-s2.0-85159465747&origin=inward&txGid=336220411876ec13e9ea7af2c8a6a2dc

UR - https://www.mendeley.com/catalogue/a53ce87d-7db6-3c8a-b73a-2f9973b70ac0/

U2 - 10.1051/e3sconf/202338102035

DO - 10.1051/e3sconf/202338102035

M3 - Conference article

VL - 381

JO - E3S Web of Conferences

JF - E3S Web of Conferences

SN - 2555-0403

M1 - 02035

T2 - 2022 International Scientific and Practical Conference on Development and Modern Problems of Aquaculture

Y2 - 26 September 2022 through 2 October 2022

ER -