Research On The Efficiency Of Commercial Banks In China From The Perspective Of Market Structure And Property Right Structure

Along with the adjustment and reform of bank market structure and propertyright structure, the efficiency of banks shows dynamic change. This paper is based on“market structure and property right structure–bank conduct–bank efficiency”framework, and introduces the structure of property rights into the traditional S-C-Pparadigm. It probes into the efficiency of banking in the two dimensions of marketstructure and property rights structure, so as to explore how the variation of bankingstructure influences banking efficiency in China, and find out its functionalmechanism， hoping to support theoretical and methodological on the policyorientation of the reform of China’s banking industry.According to the estimates of cost efficiency, it shows up-trending in recentyears; the national joint-stock commercial banks have the best performance; the gapbetween the large state-owned commercial banks and the industry is getting smaller;the city commercial banks have the outstanding performance，and the cost efficiencyof rural commercial bank is basically the same as the population mean. From theaspect of market structure, this paper uses concentration ratios and Panzar-Rossemodel to analyze the degree of competition of banking. The empirical results showthat oligopoly and competition coexist in the banking sector. Analyzing ownershipstructure by the property and concentration, we get the result that there is a trend ofdiversification of the property right structure, after the reform of equity market, butstate-owned commercial banks is still highly concentrated.For getting more details about how cost efficiency affected by the structuralfactors, this paper refers to Tobit Censored Regression Models. Firstly, the marketstructure variables have negative impact on cost efficiency, and for small andmedium-sized banking, the negative effect of market structure is much higher than theentire banking industry and large commercial banks, so there are hidden dangers ofover-expansion in small and medium-sized banks. Secondly, ownership concentrationhinders the bank from improving the cost efficiency, but the control of the largeststock-hold is significantly positively correlated with bank’s efficiency. In addition,foreign strategic investors are helpful for the improvement of cost efficiency.According to the results of empirical analysis, this paper proposes the followingsuggestions:(1) to improve the entire level of efficiency of Chinese banking, the reform and adjustment of the structure of property rights and market should beconsidered within the same framework, and also be promoted at the same time.(2) Inorder to optimize the competition environment，we should carry out market-orientedstructural adjustment, such as building multivariate effective competitionenvironment, the deregulation of market entry and exit, and realizing the importancethe healthy development of small and medium-sized joint-stock commercial banks.(3)To improve corporate governance, we should reform property right structurelegitimately, such as to create an environment of moderate ownership concentrationand the check and balance.