Empirical Research On The Relationship Between The Structure, Efficiency And Performance Of Securities Industry In China

With the pace of Reform and Opening up, China’s securities industry come into being, and show a strong vitality and vigor to achieve a rapid and steady growth. China’s securities industry has become an important force to promote capital market development gradually and made tremendous contributions to the development of China’s socialist market economy. With the slowdown of Chinese economy, more in-depth reform, more open markets, China’s securities industry will face a broader market and more intense competition. The key to maintain the vigor of the securities industry and make the industry become an international capital market is to improve market performance. There are two statements about the source of performance, one is Market power hypothesis proposed by the Harvard School who believe, by controlling market behavior, market structure affect market performance. The other is Efficiency structure hypothesis proposed by the Chicago School, who believe efficiency is the key to decide Performance. Which hypothesis is more suitable for the status quo of China’s securities industry? How can we develop the securities industry? This paper analyzes the empirical relationship between market structure of China’s securities industry, business efficiency and performance, in order to verify the hypothesis that existed in China’s securities industry and find the root cause of performance.This paper reviews the basic theory of industrial organization firstly, and make briefly summarized about relevant literature. Secondly, we use the concentration coefficients as quantitative indicators of China’s securities industry to analyze the market structure. We find that the market concentration is low and there is fierce competition in China’s securities industry. Then, this paper uses the method of DEA efficiency to estimate and analysis the efficiency of securities companies. Through research we find the efficiency of the securities business is low, particularly, pure technical efficiency is very low and the level of management in securities enterprise needs to be improved. Then we build regression model to analysis the relationship between market structure, business efficiency and performance. The results show there is significantly positive correlation between business efficiency and performance and the efficiency structure hypothesis existed in China’s securities industry. Finally, we put forward the corresponding policy recommendations for government and business respectively, according to the results of the study...