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Technical and Scale Efficiencies for Chinese Rural Credit Cooperatives: A Bootstrapping Approach in Data Envelopment Analysis

Fengxia Dong, Allen Featherstone
July 2004  [04-WP 366]

Chinese rural credit cooperatives (RCCs) are a major supplier of credit to the rural sector in the country. However, Chinese RCCs are currently encountering operating problems, and an experimental reform is being carried out to restructure and reform the RCCs. In order to have some idea about the efficacy of reform, it is important to have an understanding of the institutional economics underlying the delivery of rural credit in China. This paper evaluates pure technical efficiency, overall technical efficiency, and scale efficiencies for RCCs in China using nonparametric techniques. The use of a bootstrap algorithm is proposed to perform inference for efficiency measures.

Keywords: bootstrapping, Chinese rural credit cooperatives, data envelopment analysis, scale efficiency, technical efficiency.

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