Abstract:

With the increasing openness of China' s financial market, the commercial bank service outsourcing has enjoyed rapid development. This paper, based on the empirical analysis of the panel data from 2001 to 2010 in thirteen Chinese commercial banks, discusses how China' s commercial bank service outsourcing has affected commercial bank performance. Research shows that, as to financial service outsourcing, it produces a negative effect on bank profitability in a short term but a positive one in a long term; it exerts no obvious influence on bank cost efficiency in a short term but a negative one in a long term; it has no significant impact on the safety and stability of the bank in a short term but a positive one in a long term. Based on these findings, the author gives some effective policy suggestions to help promote the development of China' s bank service outsourcing.

Key words: service outsourcing, bank performance, panel data model