| Since the reform and opening, the banking industry has developed from one-bank market system to more individuals and more hierarchical market system, which is composed of state-owned commercial banks, joint-stock commercial banks, city commercial banks and foreign banks. Many changes have taken place in the competition conditions and market structure in the Chinese banking industry.The paper utilizes the non-structural approach, Panzar-Rosse model, to estimate the competition conditions during 1998-2005 in the Chinese banking industry. The empirical result finds that the whole banking market is characteristically monopolistic competition. To further examine the competition conditions in the different-size banking markets, the Chinese banking market is divided into state-owned commercial banking market and joint-stock commercial banking market. The results find that both markets adapt to monopolistic competition, but surprisingly, the state-owned banking market is more competitive. To find the structural changes in the competition conditions before China joined WTO and later, we add a dummy variable to examine and find that there is no salient change.We also utilize the concentration indices to evaluate the market structure in the Chinese banking industry. The result finds that the Chinese banking industry has transformed from high concentration to moderate concentration, but it still has higher concentration.There are more researches related to the relationship between market structure, denoted by concentration ratio, and market performance, but there is few related to the relationship between market behavior especially competitiveness behavior and market structure. As far as we know, there is no correlative article about national banking industry, so we try to probe it. The SCP approach argues that there exists negative relationship between them, but we don't find that there is no salient correlative relationship. |
PDF Full Text Request