Research On The Impact Of The Market Structure Of China’s Banking Industry On Economic Growth

Since the Third Plenary Session of the Eleventh Central Committee, China’s financial system and the banking system have carried out a series of reforms, the great changes happened in the banking market structure, from completely dominated by the People’s Bank of China into an oligopoly of four state-owned specialized banks, again into the current monopolistic competition system by the people’s bank of China for leadership, large state-owned commercial Banks as the main body, joint-stock commercial Banks and so on many kinds of types of bank coexist.After30years of reform, China’s financial system made very significant results: state-owned banks through the shareholding reform establish a modern financial enterprise system and corporate governance structure, the scale expands gradually, the competition gradually increase; joint-stock commercial banks of flexible mechanism were established, the macro competitive environment improved; banks which began to break the traditional limitations to provide financial support has become important support for sustained rapid economic growth. However, compared with developed countries, the development of China’s financial sector is still lagging behind, the single financing channels, inefficiencies of operate, lack of creativity, it can’t effectively promote development of the real economy. Therefore, how China’s banking reform to effectively promote economic development, this paper from the banking market structure perspective to study its impact on economic growth.In this paper, using the CRn index and HHI index by the1994-2011years data of China’s banking industry, we determine the status quo of market structure, these two sets of results illustrate the monopoly of China’s banking is gradually weakening, the degree of competition between banks is gradually increasing. Improved a simple AK economic growth model from the view of the banking industry, the conclusion is that the market structure of the banking has a significant impact on economic growth, but there are pros and cons about the complete monopoly and perfect competition of banking market structure to economic growth, what is good or bad need to consider concrete circumstances. The empirical analysis between the concentration of assets, deposits, loans and economic growth show negative correlation, indicating decline of concentrated is conducive to economic growth. The empirical analysis between the concentration of banking assets, the state-owned and the non-state-owned economy show a positive correlation between the concentration and the state-owned economy, a negative correlation between the concentration and the non-state-owned economy. The innovation is the improvement of the AK economic growth model from the perspective of banking industry, and shows that the banking market structure does have a very important impact on economic growth; Second, the economic growth divide into the state-owned and the non-state-owned economic growth, analysis the different effects of the banking market structure on the state-owned economy and the non-state-owned economy. However, the available sample data is little, and the model is too simple, leading some empirical results to be not significant, these will be improved in future research.The logical structure of this paper is that the first chapter is an introduction, mainly analyzes the development status of China’s banking industry and economic growth, and combs the related research literature; The second chapter analyzes the current development of China’s banking industry, and summarizes the history of China’s banking market structure, and determinations the status quo of China’s banking; The third chapter expounds different impact mechanisms of the complete monopoly and the perfect competition of the banking market structure on economic growth from theory, and provides a theoretical basis for the empirical test; The fourth chapter is about empirical analysis of China’s banking market structure and economic growth; The fifth chapter is about economic growth is divided into the state-owned and the non-state economic growth, analysis the differential impact of the banking market structure; The sixth chapter summarizes the above empirical results, and provide some reasonable policy recommendations for the optimization of China’s banking market structure.