Empirical research on financial governance efficiency of rural commercial banks in China

Abstract

Rural commercial banks in China originate from the shareholding reform of rural credit cooperatives. The financial governance subjects of China's rural commercial banks reallocate the financial decision-making power, executive power and supervisory power according to their own governance objectives, and different levels of financial governance efficiency are reflected during the process. We take China's 179 rural commercial banks as research samples, design the evaluation index system and construct the factor analysis model to make empirical analysis on the financial governance efficiency of shareholders, board of directors and managers, and make a general evaluation of the rural commercial banks' financial governance level. We find that the financial governance efficiency level of the three core governance subjects are all positive, and decreases in sequence from shareholders, the board to managers. Besides, the financial governance level of managers and the comprehensive evaluation value of rural commercial banks' governance efficiency are significantly low, indicating that both the allocation efficiency of financial power and the overall performance of financial governance in China's rural commercial banks need to be enhanced further.