Statistical Measure And Evaluating About Market Power Of Chinese Stock Market

Market power is an ability that in terms of imperfect market, a factory owner maintains price over marginal cost in certain time. The existence of market power not only destroys the efficiency of resource, but also deals to the unfair distribution of income, what's more, market power which is in stock market violates the principle of"fair, just and open". Unlike the previous research on market power about product market and the welfare's loss of the society, the masterstroke of the paper is the empirical study and analysis about market power in stock market. It uses the volume of trade of elasticity monopoly profit margin which is built in the paper, and regards securities investment fund as sample to analyze empirically,and then it appraises the result. According to the result, it proposes some suggestion for reducing the market power of institutional investors in Chinese stock market.In the process of building the index about market power of stock market, At first, the paper analyzes the notable distinguish between stock market and product market, namely every investor is not only demander, but also provider, his role in the stock market is not differentiated clearly, besides, they have the different purpose of purchasing, these differences make the market power's measure in the stock market is more complicated than its in the product market. And then, from analyzing and summarizing the substance and definition of market power in stock market, we know that even if the elements are very complicated in stock market, the monopoly profit is reflected as the final result of performing market power by investors; and in fact, measuring the market power of stock market is measuring the institutional investors'in stock market. Therefore, from the perspective of monopoly profit, the paper judges the institutional investors'market power, and builds the volume of trade of elasticity monopoly profit margin as the measuring index of market power.According to the result, the institutional investors'market power more than zero notably, so it considers that the institutional investors have market power. At the same time, the institutional investors'volume of trade of elasticity monopoly profit margin is greater, that is to say, the institutional investors'market power is bigger, namely, they can use the trade-based manipulation's method, to a great extent effect the stock price, and then obtain more monopoly profit. But because of the limitations of sample data, deal to the institutional investors'market power is underestimated. Then the paper chooses a strong stock to analyze this question, through the result we know that the market power in Chinese stock market mostly reflects manipulation on a stock by investors, rather than the control on the whole stock market.In the end of the paper, aimed at the existence and behavior about market power in Chinese stock market, from the respect of standardizing market environment, achieving the principle of"fair, just and open", we propose suggestion as follows: develop the institutional investors'ranks strongly, strengthen the institutional investors'supervision, and perfect the stock market's trade regulation and so on, in order to boost the development of Chinese stock market more effectively, healthy and steadily.