Research Into Factors Affecting Market Performances Of Trust Industry Of China

Since the late1970s, China established its first trust company. On behalf of Re-emergence of China’s trust industry. From then on, the trust industry has gradually become an important financial component of our country. However, more and more problems encountered in the process of development of trust industry, for example, trust company lost the direction of development, the business of trust company did not reflect the nature of the Trust, leading to inefficient and a huge risk. Ultimately, in1982,1985,1988,1993and1999, there are5rectifications of trust companies, and the number of trust company reduced to about60from about1000. This result of the shrinkage has relationship with the trust company’s efficiency and its role in the financial system.In order to explore the relationship between market structure and market efficiency about China’s trust industry effectively, In view of China’s trust industry is still in the early stages of development, the paper decided to analyze the market situation of China’s trust industry by testing SCP theory and ES theory, Using market share indicators (MS), the market concentration rate(CR) and the Herfindahl Index (HHI) measures the degree of competition in the market of the trust industry, through the empirical analysis to examine the relationship between market structure of the trust industry and market performance of the trust industry and find that the SCP hypothesis exists in China’s trust industry, Market structure have a significant impact on the market performance of the trust industry. The results show that the market structure of China’s trust industry is low oligopolies, and the market concentration is not high. Observe that the trust company is a serious lack of innovation capacity, the differentiation of trust products is small, regulatory policy can easily affect the profits of the trust company.About the Data, we use the annual report information disclosure(from2007to2010) of forty domestic trust companies, Carried out empirical research on the relationship between market structure and performance by combination of econometric methods and DEA software. At the end of the article, concludes with recommendations and policies.