The Efficiency of Chinese Local Banks: A comparison of DEA and SFA

This study investigates to which extent results produced by a single frontier model are reliable, based on the application of data envelopment analysis and stochastic frontier approach to a sample of Chinese local banks. Our findings show they do produce a consistent trend on efficiency scores over the years. However, rank correlations indicate they diverge with respect to individual performance diagnosis. This shows that these models provide steady information on the efficiency of the banking system as a whole, but they become inconsistent at individual level