Research On Commercial Banks' Macket Structure Influence Performance

In recent years.the continuous advancement of interest rate liberalization and the rise of internet finance have a huge impact on Chinese traditional commercial banks,the competition between financial institutions have become more and more intense,the monopoly advantage of traditional banking has further weakened,the regulators and managers of commercial bank must face the problem of further banking reformation.This paper has reviewed the theories of market structure and performance,then comparatively analyse the change and different of banking market structure and performance.With two countries' banking as the object of the research,we select 32 commercial banks' panel data of each country from 2008 to 2014 and make a empirical analysis of the relationship between banking structure and performance,then we can get some conclusions and give some policy advice to the reformation of banking.The result of empirical analysis indicate some conclusions:Firstly,the market concentration ratio has little influence on commercial banks' profitability,the commercial banks can't get excess profit through monopoly position,this result imply that SCP hypothesis has already been invalid in the two countries'banking.Secondly.higher market share and higher efficiency.less overhead expenses and more off-balance sheet businesses can increase the profitability,this result supports efficiency structure hypothesis and relative market power hypothesis,and imply the importance of improvement of management and development of off-balance sheet business to commercial banks' profitability.Thirdly,the factors of market monopoly,like market concentration and market share.they are positively correlated with the rate of NPL,this result tell us that Chinese and American banking are in line with the viewpoint of"concentrate-fragile",and strengthen competition can reduce the level of banking risk.Lastly.this paper put forward some suggestions for the banking reformation on the basis of empirical result as follows,banking intendant must sequentially strengthen the competition,improve the level of management and technology and reduce the overhead expenses.increase market share through diversified and individualized financial service.We wish improve the performance of banking through these measures in the future.