An Empirical Research On The Relationship Between Market Structure And Performance Of Mid-Small Banks In China

Mid-small banks are the important organizations of the Chinese domestic banking sector which performed very essential functions to stimulate the competitions of the banking industry and to restrain the monopoly of state owned banks. The competitions between the mid-small banks have the very important meaning of its self-improvement and the next step reformation of the Chinese financial industry. In the past 10 years, even the mid-small banks have developed significantly, as well as its market share of the banking industry, however, there are still a large number of the mid-small banks have been intervened by the government when they are formed, irrationality of the security ownership structure resulted the problem of miss supervision of the owner, follow up by the deep problem of the corporate management structure. At the same time, there are not many professionals have studied that under the pressure of the state owned banks, whether or not the market structure and the competition trend of the mid-small banks are reasonable. This article based on the published data analysis of the mid-small bank's market structure and performance that has built a framework of the structures and the performance correlation, and use the published data from the bank's annual report that to analysis the correlations between the market and the bank's performance.As the result, (1) from the market structure point of view, Chinese domestic mid-small bank's market structure has the positive effect on the bank's performance; (2) from capitalization point of view, the large capitalization has the efficient positive effect on the bank's profit.