The impact of government ownership on performance: Evidence from major Chinese banks

Chinese banking system plays increasingly more important role in the word financial system and has attracted a lot of attention during recent years. The purpose of this paper is to study and analyze the relationship between government ownership and major Chinese banks’ performance.Our paper studies the sample data collected during the period between 2000 and 2011, and regression analysis is conducted for the purpose of examining how the government ownership change would impact the bank performance. As indicated by previous literature about bank performance, bank performance is often affected by bank size, capital ratio and net interest margin (NIM). Our results show that decreased government ownership can improve major Chinese banks’ performance.