INVESTIGATING PERFORMANCE DETERMINANTS OF LISTED COMMERCIAL BANKS IN CHINA
The purpose of this study is to conduct an empirical investigation of the factors that determined the levels of performance of 14 commercial banks in China that were publicly traded over a period of ten years. In order to accomplish this goal, in the first place, the financial performance measurement index (PI) is built utilizing CAMEL's components. This is done as a supplement to conventional performance measurements such as ROA and ROE, and it addresses the constraints of those metrics. After PI is used to determine the performance of the banks, the Structural Equation Modelling (SEM) model is used to analyze the impact of financial institution, financial, or macroeconomic on the banks' performance. Research shows the bank-specific variables have such a major impact on bank performance and therefore are key factors in the performance of Chinese-named commercial banks. Microeconomic factors have shown a considerable negative effect on bank performance whereas financial factors have shown no affect on Chinese commercial banks. This study not only presents data but also makes suggestions for how Chinese commercial bank management and banking authorities can enhance the performance of their institutions based on the findings.
Chinese commercial banks, performance determinants, CAMELS, structural equation model