A Study On The Market Structure And Efficiency Of China 's Commercial Banks

In this paper, I analyze the data from14listed commercial banks listed in Chi na from2007to2011. And I find the following facts:Firstly, I analyze the market structure of banking sector by using CR4、CRa an d HHI as indicators. I find that China’s banking industry is experiencing a transition from a monopolistic competition to fully competition. The competition environment of China’s bank sector has been formed.Next, I focus on management efficiency using the X-efficiency as the evaluatio n index. I find that the management efficiency of the joint-stock commercial banks i n2009was significantly higher than that of state-owned commercial banks. But, aft er2009, the situation has undergone a subtle change that in the management effic iency of state-owned commercial banks is higher that of the joint-stock commercial banks. The difference of X efficiency is mainly from the difference between state-o wned banks and joint-stock banks as well as among joint-stock banks.The results of my study have proved the hypothesis of market power and effici ent structure hypothesis doesn’t hold in banking sector in China. I find the higher d egree of market concentration will lead to lower profitability and lower management level for Banks in China. Discrimination in both ownership and scale may be one of the reasons causing this phenomenon. Banks which have higher management le vel doesn’t mean they will enjoy higher growth rates in market share, because ban ks may have different client resources and management efficiency doesn’t consider the special resources of banks in China.In the last chapter, basing on the special relationship between the specific mar ket structure and commercial bank efficiency, my paper gives some meaningful sug gestion.