Market Structure Of China's Commercial Banks

The market structure has created the specific market environment for carrying on various kinds of economic activities in enterprises, significant to market behavior and market performance of studying enterprises further. The commercial bank, as a kind of financial enterprise, its production and operating activities will be influenced by market structure and restriction unavoidably. Under the background of fact that the reform in banking system of our country is deepened progressively, it is essential and helpful for structure of market of commercial bank of our country to carry on research.The thesis research on the structure of market of commercial bank of our country is launched from two aspects. The first aspect describes the market structure characteristic and examines the structure - performance relation. The analysis of this aspect is made up of Chapter One and Chapter Two.It is necessary to carry out a standard description to the market structure at first to study the market structure. According to the industrial organization theory, market concentration ratio, product differentiation and the entry barrier are the indispensable parts of description. Chapter One sketches the contours of the essential feature of the structure of market of commercial bank of our country. This chapter is divided into four sections. Section One explains the definition in the thesis of the structure of market of commercial bank --Market attributes of nature that Influence the market competition course of commercial bank, including market concentration ratio, product differentiation and the entry barrier. Section Two analyzes market concentration ratio. Market concentration ratio is to express in one market what kind relative scale structure index the seller or the buyer have and can reflect the market competition degree more directly. This selected works calculate the market concentration ratio with CR4 and HHI. The results show that the market of commercial bank of our country possesses the characteristics of oligarchic monopoly, but there is a gradual downward trend in market concentration ratio. Section Three analyzes product differentiation. Analyses indicate that the commercial banking of our country is dull in variety and that the difference of the products is relatively low, in inferior position in the non-price competition. Section Four analyses the barrier of entering and draws the following conclusion: First, after our country joins WTO, the market access condition of the foreign capitals bank is looser than that of China-invested Bank, the foreign capitals bank becomes the important potential entrant. Second, the market scale barrier of commercial bank of our country is relatively low. Third, extensive branch bank network and prestige in discharging ability of bank are main differential barriers of products of market of commercial bank of our country.Chapter Two studies the relationship between market structure and market performance. A large amount of researches of America and Europe indicates that in the banking, the positive correlation relation exists between market concentration ratio and profit rate. As to this there are two kinds of completely different explanations: collusion hypothesis and effective structure hypothesis. The thesis examines structure - performance relation of the market of commercial bank of our country with the two hypotheses. According to the result, two hypotheses cannot get support, the remarkable positive correlation relation does not exist between market concentration ratio and profit rate. The explanation four the result derives from two perspectives: First, earning capacity of the state-run commercial bank and its enormous scale are not matched, so market concentration ratio can't explain the profit rate effectively as an explanation variable. Second, the monopoly position of four major state-run commercial banks of our country is not guaranteed in the market competition--select the superior and eliminate the inferior, but in that arranges of state-run monetary system of the...