The Impact Of Chinese Securities Industry's Concentration On Its Profitability

Known as an economic "barometer." the securities industry as an industry, has formed a basic frame on large scale. At the same time there are still many problems in China's securities industry.In this paper, from the perspective of the theory of industrial organization, it analyses the relationship between the degree of market concentration and profitability empirically in China's securities industry. First, the author sets out reviewing the theory of industry concentration degree, the theory of profitability of the business, and the current theory of relationship between them. Then focus on the securities industry, the author analysies empirically the relationship between securities industry concentration and the ability to profit . At last,according to the result of the regression, the author provide some suggestions to enhance China's securities profitability.Through the analysis of the China's securities industry market concentration and profitability , we have the following conclusions :The degree of concentration in China's securities industry showing a further decline to rise slightly rising trend from 1997 to 2006. China's securities industry is in the industrial phade of low-oligopoly to quasi-oligopoly, there are still larger room in the market concentration . There was a significantly positive correlation between market concentration and Industry profit margins, We can improve concentration of the securities industry to enhance the profitability of the securities industry.