The Impact Of Banking Market Structure On Bank Performance And

Market structure changes and bank profitability out of two big background,let us think whether there exists a certain internal linkage mechanism between the two,by the high profit margins up after the banking sector is built to last,or are still simmering. We purport by examining China,Japan,South Korea’s banking market structure and bank profitability and stability of the relationship,made clear the three banking market structure factors that affect its profitability and anti-risk ability of similarities and differences.This paper first introduces the market structure of industry economics(SCP) theory and the theory of relative market power(RMP),explains the theoretical framework in the mechanism of action of the banking sector.Second,by review before scholars on the research of the banking market structure,found in the banking market the applicability of the theory of SCP and RMP there have been various opinions; At the same time, influence on the stability of bank market structure there are three kinds of different views on the issue.Again, this article obtained from bankscope database in China, Japan,South Korea 2003-2003,the banking industry data,search for the three macroeconomic data from World Bank, the introduction of interaction to establish the regression equation, through empirical at four o ’clock the following conclusions: first,in China,the Bank market share(MS) for there is no significant impact on Bank profitability,so you can’t proof the relative market power hypothesis(RMP). And the improvement of market concentration,can significantly improve the bank’s yields. Second,in Japan and South Korea,the bank market share(MS) and the market concentration does not affect bank profitability. To promote the efficiency of management,reduce the bank’smanagement costs,and enhance the bank profitability. Third, in China,the banking market share,the greater the degree of market concentration is higher, the greater its bankruptcy risk,but the higher the interest coverage is low risk of default. Fourth,in Japan,the more concentrated the market,the greater the bank bankruptcy risk; The market share,the greater the bank default risk is reduced. Fifth,through market share and interaction of interest spreads,found in China market concentration is higher,the main source of income in the banking industry, interest income also play an important role for the stability of bank line.Finally, according to the empirical results,to provide some Suggestions for the development of the banking sector,in general is: although competition can inhibit the economic rent,but the introduction of excessive could lead to unintended bank risk.