Positive Analysis On The Market Structure,Scale And Performance Of Chinese Investment Bank Based On The BGR Model

The investment bank is the financial organization which mainly deals in security business, and it is the bridge between finance and economy, and it is very important in the whole economy. The investment bank in our country is come of 1980', and it has become a system with Chinese characteristic until now. It has contributed to our economy greatly, and is very important to it. By joining in the WTO, more and more foreign banks come to China. Those banks are very mature on capital, innovation, management, service, human capital, international strategy and so on, so our investment bank must face the serious competition and challenge. How to enhance its strength is related to its existence. The hard core of this paper is to analysis the lack of Chinese investment bank through market structure, scale and the total profit rate, then give some suggestion about how to enhance the strength of Chinese investment bank. The first chapter mainly introduces the meaning of investment bank and its history, and then defines the history and actuality of Chinese investment bank in detail. At last, point out some problems of our investment bank. The second chapter is the positive analysis about Chinese investment bank. First, it analyses the concentration of Chinese investment bank. Concentration is the most common index about market structure. A higher concentration means the degree of monopoly is higher, vice versa. According to the positive analysis and the international standard, the concentration of our security industry is too low, and the competition is too serious. A high concentration is a character of mature finance industry, so our investment bank is quite youthful. Then this paper introduces two hypotheses of market structure and performance. Those hypotheses both say that the relationship between concentration and performance is positive, but their explanations are quite different. For finding out which hypothesis is more fit Chinese investment bank, this paper designs a new model based on BGR model to take the positive analysis of the relationship between market structure and performance of our security industry. According to the result of analysis and the real condition, the concentration is low but the profit is high. The concentration has little influence on performance, because our government regulates the security industry rigorously. So there is monopolistic profit in security industry. For a whole analysis, this paper collects several years' data of some indexes of our security industry to take a lengthwise analysis. The result indicates that there is no remarkable relationship between market concentration and performance in our security market, and the benetlt won't grow while the market scale is growing. Then this paper take the cointegration analysis, and the result demonstrates that there is long stable relationship between the market yield and the net assets yield rather than the total capital and the net assets yield. This paper also collects several stockjobbers at a same time to compare their capacity of gaining profit. To see if the larger stockjobber can gain more profit. The conclusion is that there is no distinct relationship between the scale and the performance of our stockjobbers. But the sample is too limited, so the conclusion is not very precise. At last, this paper brings forward some suggestion. Our government should gradually loose the regulation of the security industry, and try to promote the right competition by market. The government can constitute some privilege to encourage those efficient stockjobbers to increase their market share, Each stockjobber should enhance their own efficiency, and build their capability of controlling the risk, and emphasize on the human capital, and actively widen the capital source; and actively exploit the business. At last, the government also can promote the security industry by stimulating the stock market.