Research On The Relationship Between Market Structure-Efficiency And Performance Of Chinese Trust Industry

Late start in China trust industry, but it developed fast in past ten years. By the end of 2012, China’s trust industry exceeded the second largest industry in the financial industry after the banking sector. At present the trust industry faces transformation development, what the market structure-efficiency and performance showed is worthy of our study, this can lay the foundation of trust business’ further development.Basing on the two major theoretical hypotheses include market-power hypothesis and efficient-structure hypothesis, this paper goes on the empirical research for the relationship of China’s trust industry market structure-efficiency and performance. In the first, the paper describes the whole market actuality and growing trend; then it selects 63 trust companies’ panel dates from 2007-2013, measuring the market concentration by HHI and CR, introducing the index of entry barrier to test the barriers level, and analyzing the product differentiation and economies of scale problems; at last it calculates the trust industry pure technical efficiency、scale efficiency and comprehensive efficiency through DEA, and establishes the regression model to test the relationship between market structure-efficiency and performance and verify if the trust market conforms the two major theoretical hypotheses.Concluded that: ①Chinese trust market concentration was a little low and belongs to low oligopolistic market, and it in 2013 was more competitive than in 2007; But the product differentiation was very low and the level of entry –quit barrier was very high,and the economies of scale were not significant. ②63 trust companies’ three kinds of efficiency had all improved in the past seven years, the scale efficiency level was high and its gap was non-significant, however the pure technical efficiency’s situation was opposite. ③ the market concentration 、 market share 、 pure technical efficiency and performance have positive correlation observably, but the efficiency and market share indistinctively have positive correlation, it means that our trust industry conforms modified efficient structure hypothesis.④ the total assets and controlling shareholders nature all have positive correlation with performance, it declares that amplifying scale is beneficial to profit, and the trust company controlled by non-financial institution is more profitable.Through analyzing by synthesis, this paper propounds policy suggestions form the point of trust industry supervision and trust company relives based on the consequence. Itsuggests that the industry should build a professional supervision department and be deregulation, and the companies should innovate persistently and strengthen cooperation between the same trades of business.