The Empirical Study On The Market Structure And Market Performance Of China’s Commercial Banks

Commercial bank is an important part of the financial field.It plays an importantbacking role in the development of the national economy. With the increase of competitorsand fiercer competition, the market structure of the former commercial banks in China haschanged. This article is to study the changes of China’s commercial bank’s market structureunder the increasingly competitive financial environment, and influences it brings to eachbank’s market performance. Further more to determine the relationship between marketstructure and market performance of China’s commercial banks.First of all, this paper introduces the background, meaning and the relative theory of thisstudy. Secondly make use of14nationwide commercial banks’relative data in2003-2011as asample. By using econometric model to make an analysis on the relationship between China’scommercial banks’ market structure and their market performance. This text uses Eviewssoftware to analyze the data and draws the relevant conclusions between structure andperformance. The conclusion involves that the structure of China’s commercial banks isoligopolistic type; the level of market performance is increasing and joint-stock commercialbanks have a higher level of performance than the state-owned commercial banks; marketconcentration on the structure of China’s banking market show a negative correlation, marketshare and performance show a positive correlation.Finally, according to the analytical conclusion of China’s commercial bank’s marketstructure and market performance, this text provides some recommendations to optimizestructure and improve the performance: accelerate the commercial bank mergers andacquisitions to enhance its operational efficiency of the size of the group; reduce the bank’sbarriers, enhance the efficiency of the sector when optimize the structure; encourage thedevelopment of small and medium-sized banks to increase the degree of competition in thebanking sector; advance the reform of property rights, using diverse property rights structure to enhance the bank vitality.