Analysis On The Concentration Of Banking Industry In Taiwan And Its Influence On Competitiveness

The banking industry is the lifeline of the national economy,the sustained and healthy development of banking industry is conducive to the rapid growth of national economic system.Therefore,the academic circles have always attached great importance to research the field of the law of development of banking industry,the research on the change of the market structure is also an important part in this field.At present,the research on the changes of market structure of bank industry is very profound,however,with the strengthening of the cross-strait financial cooperation,the domestic academic research of the structure of banking market of Taiwan area is always inadequate,it can not be able to provide more reference on the law of development of Taiwan banking industry to our government.Therefore,in order to provide some my own views on the theoretical study of strengthening the cross-strait financial cooperation to our government.This paper starts with the evolution of the market structure of the banking industry in Taiwan area,and carries on a thorough analysis on it.This article first has calculated the CHn index and the HHI index of a total 16 years relevant data that from 1997-2012 years,I found that the market concentration degree of the change process showed "S" shape:the market concentration degree from 1997 to 2004 is at a low level stage;the market concentration degree from 2005 to 2008 is on the up;and after the 2009 year,the market concentration degree is at a high level stage.Then this paper has carried on the discussion to the law of development of banking market structure of Taiwan area.By induction on the area of the early financial reform,the first time of financial reform,the second time of financial reform and the third time of financial reform respectively.Then this paper uses the Eviews6.0 software to establish the empirical model,and to find out the main factors that impact the concentration changes.Through the empirical results I found that the changes of the economic situation is proportional to the degree of the banking concentration;and usually the more difficult to profit in the banking industry,the more higher the degree of the banking concentration is;and the higher quality of the labor is,the more higher the degree of the banking concentration is;more conducive to the increase of concentration;and the government policy that have been made the degree of the banking concentration being trend to increased;at the same time,the deepening of globalization also makes the degree of the banking concentration increased.Therefore,the local government can adjust the above factors through the relevant policies to improve the degree of concentration of banking industry.Finally,this article analyzed the effect on the four aspects of the bank market,including market shares,innovation,safety and profitability from the changes of the banking market concentration.Through the study I found that low degree of concentration market structure due to the excessive competition in the market,even vicious competition phenomenon,which seriously restrict the development of the market shares,innovation,safety and profitability,and it limits the upgrade of the competitiveness of the entire banking industry.While the high degree of the concentration of the market structure can alleviate the original situation of excessive competition to a great extent,thus improving the advantage of scale economy of banks,and improving the bank's innovation,safety and profitability,and thus promoting the competitiveness of the banking sector obviously.Therefore,in order to further improve the competitiveness of the industry,the local government must continue to improve the level of concentration degree of the banking sector first.