Effective and Sustainable Strategy of Chinese Banks Based on Input-Output Increased DEA Design

The analysis of optimal output efficiency with traditional data envelopment analysis (DEA) cannot be directly applied to a production strategy of promoting the sustainable development of Chinese banks, because both inputs and outputs increase during economic development. In this paper, a new DEA is presented with two innovations. The First innovation is that, the research data are extended to time-series data instead of cross-section data as before. The second is, the simultaneous increase in input and output from the input/output decrease/increase production is developed. As an application of the BCC (Banker, Charnes, Cooper) Bi-objective Generalized DEA (Bi-GDEA) model, the simulation strategies were well implemented in Chinese banks in 2017 using data from 2004 to 2015. The three inputs and one output of the banking sector have been adjusted to make each year’s decision making unit (DMU) efficient in the framework of 2004 to 2017, and both inputs and outputs are monotone increased. It may provide an alternative strategy for the effectiveness and sustainability of Chinese banks development.