The impact of bank specific and macroeconomic factors on China’s bank performance

This paper attempts to analyse Chinese banks from the perspective of an empirical investigation into the determinants of Chinese banks performance taking account of ownership structures. In a previous study of Chinese banks Lin and Zhang (2009) discovered that the four big state-owned banks were less profitable, had a higher proportion of non–performing loans compared to commercial privately owned banks in China. However the Lin and Zhang research included a significant time frame where reforms of state-owned banks had not commenced. Our paper however, covers a time frame over which China’s state-owned banks had undertaken significant reforms. Unlike previous research which focused on a small number of bank specific factors, our research performs a panel approach to assess the determinants of bank performance by employing bank specific, macroeconomic and globalization variables.