An Empirical Analysis On Market Structure And Performance Of Chinese Commercial Banks

With the sustainable development of financial liberalization and international economic integration, sustainable improvement of banking opening and competition degree, foreign bank rapid entry as well as fierce competition will induce Chinese banking to face unprecedented challenge. In new situation, it is the important problem for Chinese banking how to deal with intense challenge from foreign bank, optimize the market structure of Chinese banking and raise the whole achievement level of Chinese banking. Therefore, it is significant realistic meaning for improving the competition strength of China banking that do research in market structure and achievement of our banking.Basing on analysis Standard Model of the market structure, conduct and performance in industrial organization theory, from theoretical and empirical views respectively, do much research in the relationship between market structure and performance in China. Then objectively understand the current situation in Chinese commercial bank. This paper is divided into five chapters. The first chapter, introduce the theoretical base of analysis, that is to say the research results about the connotation, historical evolution, market structure and performance of industrial organization theory of bank at home and abroad. The second chapter, analyze the market structure of Chinese banking concretely. By analyzing the market concentration on the total assets, deposit, net profit of the commercial bank, it is concluded that currently the market structure of Chinese banking belongs to highly oligarchy monopoly type, four big state-owned commercial banks are in the absolute monopoly status. However, viewed from the whole trend, our banking is experiencing the evolution from intense monopoly to monopolistic competition. The monopolistic situation of state-owned commercial banks is gradually broken. The third chapter, use ’Within and Between’ comprehensive assessment method to estimate the performance of fourteen sample banks and calculate the performance score. At the same time, apply cluster analysis of panel data on the performance score. Then, it is relatively correct to judge and divide the achievement level of every bank. The forth chapter, basing on ’traditional collusion hypothesis’ and ’effective structure hypothesis’, use panel data modeling method to analyze the relationship between market structure-and performance in our commercial banks. The recursive results indicate that ’traditional collusion hypothesis’ and ’effective structure hypothesis’ both are unfit in China. Moreover, the relationship between market structure and performance is not significant. The fifth chapter, analyze the reason about the significant relationship between market structure and performance, then make some suggestions on improving their relationship.