Green credit operation performance evaluation of commercial banks in the context of epidemic and carbon reduction

Abstract

As the world is paying increasing attention to carbon reduction, this paper uses Chinese commercial banks’ green credit and applies the DEA-Malmquist index method to construct an evaluation index system based on the panel data of the top 10 Chinese banks regarding green credit from 2015 to 2021. The results of the study show that: (1) the overall total factor productivity of the banking industry in mainland China from 2015 to 2021 is greater than 1 and shows a fluctuating upward trend except for 2015, with the mean value greater than 1 indicating a steady increase in the green credit operating efficiency of the banking industry; (2) Further analysis shows that the average value of the technical efficiency change index is greater than the average value of the technological progress index, which can be understood as the important reason for the rising operational performance of green credit business in the banking industry, and technological progress also provides a supporting role for the rising operational performance; (3) the average value of the scale efficiency change index from 2015 to 2021 is less than 1, and from 2017 onwards the value starts to be less than 1 and declining, it can be concluded that scale efficiency hinders the increase of technical efficiency index. (4) The magnitude of change in total factor productivity and the influencing factors of the 10 banks are all related to technical efficiency, indicating that the improvement of technical efficiency is the dominant factor in the improvement of green credit operational efficiency; (5) the pure technical efficiency of all 10 banks keeps increasing while the scale efficiency is decreasing, indicating that pure technical efficiency is the key factor in the improvement of banks’ technical progress index, while scale efficiency inhibits the further improvement of technical progress index. The increase in the technical progress index has been inhibited by scale efficiency.