Research On Market Structure,Innovation Ability And Performance Of Listed Banks In China

Since the reform of shareholding system in banks,with the continuous development of joint-stock banks,city commercial banks and private banks,the original oligopoly pattern of Chinese banking industry has long been broken and a diversified and Intelligent competition system is gradually forming.Besides the aggravation of market competition caused by the change of banking market structure,the interest rate marketization and the development of online finance had also aggravated the competition among banks.Especially after the central bank liberalized the interest rate of deposit and loan,banks can't live on the traditional business model that is dominated by deposit-loan spreads income.Thus banks have to find other ways to make profits,such as business innovation,human resource innovation,technique innovation and risk management innovation.This paper studies the changes in the market structure of banks,improvement of innovation ability and the mediation effect that innovation has on the impact of market structure on performance,so as to demonstrate the importance of improving innovation ability.Subsequently this paper provides some advice on bank transformation.Firstly this paper summarizes the relevant literatures on the impact of market structure on performance and the impact of innovation ability on performance,and finds out that there are mainly two sides of views about study on these problems:a view is that reduction of market concentration and rise of innovation ability have positive effect on performance;another view is that changes of market concentration and innovation ability have no obvious effect on performance.Secondly it defines market structure,innovation ability and performance.And then it proposes four research hypotheses base on the references to traditional industrial organization theory and financial innovation theory.Next it describes the present situation of market structure and performance of the banking industry and makes a descriptive analysis.Factor analysis and descriptive statistical analysis are mainly used to analyze the current situation of bank innovation ability.Afterwards this paper builds models based ontheoretical literature and research hypothesis.And lastly it provides suggestions on improving performance after the results of regression analysis.This paper chooses relevant data of 15 listed banks from 2009 to 2017,and measures the innovation ability of banks from four aspects: business innovation,human resource innovation,technological innovation and risk control innovation,and sets a two-level index system including seven variables,i.e.net income of processing fees and commissions,the proportion of handling fees and commission income to business income,the proportion of employees with bachelor's degree or above to the total number of employees,net profit per capita,number of self-service counters divided by number of business networks,non-performing loan rate and capital adequacy rate.Using SPSS20.0 factor analysis method,the comprehensive score of innovation ability is obtained.Then,taking the return on total assets as the explanatory variable,and market concentration,market share and innovation ability as explanatory variables,it verifies the effects of market concentration and market share on performance and innovation ability on performance respectively.At the same time,stata14.0 is used to verify the intermediary role of innovation ability through three-step test of intermediary effect and sobel method.After regression analysis of panel data,the following conclusions are drawn:(1)The lower the market concentration of banking industry,the higher the market share,the higher the performance of banks.This is consistent with the theoretical analysis and conforms to the hypothesis of relative market power in industrial organization theory.In recent years,China's banking industry concentration has shown a downward trend,which has promoted the increase of bank performance.(2)The innovative ability of banks has a positive effect on their performance.Business innovation,human resource innovation,technological innovation and risk control innovation of banks are conducive to the reduction of operating costs and the increase of operating income,so the performance of banks will increase with the improvement of innovation ability.(3)The intermediary effect exists in the process of the impact of market structure on bank performance,that is,market structure affects bank performance by influencing innovation ability.Finally,based on theoretical and empirical analysis,the following suggestions are put forward:(1)Actively Promote Innovative Reform of Banks: Increase efforts in developing various innovative non-interest income businesses or innovative technologies,such as promoting innovation of financial products,attaching importanceto the development of financial science and technology,etc.(2)Appropriate relaxation of access threshold for banks: appropriate relaxation of entry and exit barriers for private banks,so that the banking industry can develop into a free competitive market where the fittest survive and the fittest die out,avoid the banks with monopoly resources following the old-fashioned rules,and reduce the efficiency of resource utilization.(3)Strengthen the supervision of relevant financial departments: Financial supervision departments should check the innovative business of banks in real time,strictly control the capital adequacy rate,and timely solve the policy problems encountered in the process of bank innovation.