Market Structure And Performance In Chinese Banking

Market structure and performance are the two most important topics in the theory of industrial organization. In the theory of industrial organization, the two most significant hypotheses are the Market-Power Hypothesis of the Harvard School and the Efficient-Structure Hypothesis of the Chicago School. This thesis conducts an empirical research on the two hypotheses in China's banking industry, and draws some conclusions on the basis of the analysis.There are five chapters in this dissertation, chapter one reviews the research status and deficiency among both domestic and abroad, lists the practical means of this research; chapter 2 expatiates the meaning and the drivers of banking market structure, analysis how does the characteristics of bank industry affect market structure, then analysis the way the market structure will be changed after the entry of foreign banks, and measure the market structure using the data from 2001 to 2003; chapter 3 expatiates the meaning and the drivers of banking performance, then selects 19 indexed out of 13 banks from both the quantity in 2003 and average quantity from 2001 to 2003 and calculates them by both factor analysis means, then it educes the Chinese banking market performance score rank; chapter 4, analyses and verifies the relationship between Chinese banking market structure and market performance, Due to that this dissertation analyses the reason and suggests some policy advice; finally it comes to the conclusion.The innovations in this dissertation are: first it gives an idea of how the entry of foreign banks will affect national market structure ,and suggests employee population as a new index to do quantitative analyses on Chinese banking market structure, and does demonstration and compare on new indexes and old ones; second on the basis of data from 2001 to 2003 it educes the Chinese banking market structure rank and performance rank, market performance and the relationship between market structure and performance from both the quantity in 2003 and average quantity from 2001 to 2003 respectively, then suggests Chinese banking should try their best to improve the efficiency rather than to enlarge market share.Since the limitation of acquiring data, this dissertation only collect 13 commercial bank as sample, it could be improved as gathering more data in state commercial bank, joint stock commercial bank, city commercial bank and foreign capital bank in the future.