Impact On Loan Resource Allocation Efficiency From Chinese Commercial Banking Market Structure

The financial system is one of the fundamental component of a country's economy,and the most important functionality of the financial system is deposit and loan business of the commercial banks.From the perspective of financial development and economic operation,commercial banks take an important role,therefore,from the perspective of commercial banks starting of commercial banking industry,this paper discusses the market structure and efficiency of resource allocation of the loan relationship,and trying to obtain meaningful and value from this point of conclusion.The paper has three major parts,the first part is the introduction,introduces the background and significance of the article,and provides ideas and research framework,is introduction content;The second part is the theory and literature review,summary and evaluation system of the existing literature,and the introduction of industrial organization theory as the theoretical foundation for this article;The third part is the core framework of this paper,and it consists of two components,the first is the evolution of Chinese commercial banks and international comparison of market structure,integrated systems analysis of market structure evolution of Chinese commercial banks,and the United States,Japan,the evolution of commercial banks comparison process.Followed by the major component of the article which is the market structure,the empirical analysis of credit resource allocation efficiency.Finally,we conducted an empirical test of industry concentration and the efficiency of the associated loans.We used industrial concentration of market structure as the measurement in this study,and built Herfindahl Index,Entropy,Spatial Aggregation Index to evaluate the degree of industrial concentration,the use of DEA model,Jeffery Wurgler Model and the NPL ratio to evaluate the efficiency of resource allocation loans,using regression analysis,mean test methods,DEA method,panel data model,correlation analysis and other research.With all the analysis in this article of international comparative empirical analysis point of view,the following conclusions are made:Comparing with some other major countries in the world,Chinese commercial banking system is relatively more monopolic,and thus has a debt default issue credit crunch problem,non-performing loan ratio rises and other issues.From the evolution of the market structure point of view,as Chinese market's concentration of industry in the commercial banks keeps decrease,the degree of competition within the industry has been improved,as a result of banking sector reform.From the empirical point of view,even though the Chinese commercial banking industry concentration is declining,but the absolute level is still at a high state,indicating that the degree of competition in the commercial banking industry is still far from fully competitive levels,impair efficiency.Our data and test results show that the resource allocation efficiency of Chinese commercial banks loans is improving through the recent decades,but the efficiency is still low,which stems from SBC problems and historical legacies,whether HHI index or EI index or aggregation index,are all showing a similar pattern,indicating that the results are robust.Interestingly,commercial banks showed the same spatial aggregation,and other similar industries,industrial clusters also reflected in the commercial banking sector.Our test results from analysis on correlation between market structure and loan resource allocation efficiency shows that,a high level of market concentration is reverse correlated with loan efficiency,which means the higher the market concentration level the more monopolic the industry would be,which would eventually lead the lower loan efficiency.Thus commercial banks should focus on how to reduce the market concentrations,and improve the competition within the banking industry.Chinese commercial banking industry's biggest challenge now is lack of competition.To solve this problem,the management and policy makers should try to improve the efficiency of resource allocation,optimization and credit assessment methods means of angle start development of commercial banks in order to achieve the whole industry,and promote stable economic growth and avoid fluctuations in the economy.