The Changes Of Institutional Environment And The Efficiency Of Bank’s Innovation

With the interest rate market and financial disintermediation era arriving, commercial banks will face serious challenges spreading the main current business model. And the homogenization of the business and profit model will become unsustainable. Bank need to improve the ability of innovation change the traditional single-profit model, find a new profit growth point of the bank and develop a diverse and non-interest sources of poor market prospects of profitable channels to obtain competitive important safeguard. Therefore, innovation ability of commercial banks has become important for the survival and development of power. Institutional environment as the company’s significant external support environment, as an irreplaceable role to the bank continued to develop, especially in terms of innovation capacity upgrade. For countries with economies in transition, the market-oriented reform and improvement may also be an important factor in the impact of innovation performance. However, from the research currently about bank’s ability to innovate, there is few studies on changes in the institutional environment of innovation ability and efficiency of inter-bank relations and conducted in-depth research. In view of this, in order to clarify the mechanism of the institutional environment change and innovation efficiency of the bank, the paper from the principal-agent theory, theory of innovation, environmental changes as part of the institutional governance mechanisms outside the enterprise, using standard research and empirical combining Methods. The effects of changes in the institutional environment for innovation and efficiency of the bank let the research has some theoretical significance and practical value. Then proposeing appropriate policy recommendations.This article can be divided into five parts. The first part is introduction, including the background and significance of this research, domestic and foreign literature review, research ideas and methods, research innovation and features and so on. The second part is the concept definition and theoretical basis, this part gives a definition of the relevant concept of the research object and then elaborates on theoretical basis such as the principal-agent theory, and enterprise innovation theory. The third part is about the theoretical analysis and the research hypothesis which shows, with the environmental change, how much influence the management and development of those Chinese commercial Banks will be exerted on, the current development situation of the financial innovation in Chinese banking industry, and then carry on the deep analysis of the impact of environment change on the efficiency of the banking innovation mechanism, which is also the hypothetic basis of this research. The fourth part is the empirical inspection. Finding 16 stock-listed Commercial Banks in China as the research object and using multivariate linear regression model, this article reveals the impact of environmental changes on the efficiency of banking innovation. And the last part is about the research conclusions and policy suggestions. Conclusions the research found are as follows:(1) Obviously, there exists positive correlation between the institutional environment change and banking innovation ability as well as financial performance, it shows, as an important external governance mechanism, institutional environment changes in line with the optimization improvement of the institutional environment. Various elements bring in more competitive market competition which in turn encourages Banks to improve the efficiency of resource allocation. And the innovation ability, the financial performance of stock-listed Commercial Banks in China experiences a significant surge too. (2) There also exists a positive correlation between bank’s innovation ability and financial performance. It suggests, as the ability of an optimized allocation of innovation resources in commercial Banks that innovation ability, the ability could become the profitability of commercial Banks. That is the innovation of the stock-listed Commercial Banks in China is effective. (3) Still, there are positive correlation between the change of system and environment, innovation ability cross terms and the bank’s financial performance, which means that the change of environment and system has the positive regulatory effect on "turning innovation ability into profitability" mechanism. That is environmental and systematic change could reinforce the banking innovation efficiency.