Study On The Relationship Between The Banking Market Structure And Performance Of Our Country

This paper firstly summarized the related literature on the relation of banking marketstructure and market performance at home and abroad in detail.Then market structure, marketperformance and the relationship between them are analyzed in theory based on the theory ofindustrial organization structure-behavior-performance analysis model.For furtherexpansion of the article lays a solid theoretical foundation.Secondly Chinese bankingdevelopment and market structure are analyzed.The market share of China’s banking industry,absolute market set, relative market concentration has been carried on the detailed discussionrespectively from the aspect of Banks in China’s banking industry share of the assets, balanceshare, loan balance share.And to our country banking industry barriers to entry and exitbarriers has carried on the simple instructions. Then The performance of China’s bankingindustry are analyzed in detail from the bank’s profitability, liquidity and security for ourcountry banking industry.Then based on the above analysis about the banking marketstructure and market performance, draw lessons from the practice of predecessors, constructeconometric model to examine the relationship between our country banking market structureand market performance. Finally according to the Chinese banking market structure andmarket performance status and measurement results, puts forward some countermeasures toimprove the performance of banking industry in our country.The main conclusions of this paper:First, through the analysis of the banking industry’s market share, market concentration(CR4), relative concentration index (HHI), and other market structure index analysis，we cansee that China’s banking market concentration presents the downward trend, and reflects thedegree of competition of China’s banking industry has increased，the degree of monopoly hasfallen。But, the four major state-owned banks of our country have large scale and there aresome historical reasons, therefore, the four lines of monopoly will still lasts for a long periodof time.Second, while the big four Banks have a monopoly position, but from the perspective ofits operating performance, in some ways even lower than the national joint-stock commercialBanks.For example, in terms of return on capital is far worse than joint-stock commercialBanks。In addition, from the point of the strategy of management, four large banks’ business strategies tend to robustness management.Therefore, the loan-to-deposit ratio is much lowerthan joint-stock commercial Banks; From the point of management risk, the big four bank’snon-performing loan ratio far more than national joint-stock commercial Banks, it alsoreflects the monopoly status has brought the big four Banks management inertia, lack of themotivation of perfecting the shortage.Therefore, to break the monopoly, to create acompetitive environment for the overall banking is an important development directionThird, from the various samples of the influence of market structure on marketperformance analysis, we can find that market concentration has a negative effect on bankperformance, show that there is no market power hypothesis in our country, but we found inthe return of the joint-stock commercial Banks, the market share has a positive effect on itsperformance, show that joint-stock commercial bank passbook efficient structurehypothesis.It further shows that we need to promote our country banking industry’s overallperformance improvement, we must encourage diversified competitive subject,furtherliberalisation of banking industry barriers to entry, formulate relevant laws and regulations tocreate a good environment for the healthy development of China’s Banks.