The effect of market structure on operating performance of commercial banks - An empirical study based on the mainland china and taiwan banking

Abstract

The effect of market structure on operating performance of commercial banks has always been an important issue in the field of financial development and management studies. This paper analyzes the market structure and operating performance of the banks in Mainland China and Taiwan by using the data of 25 commercial banks in Mainland China and 16 in Taiwan between 2003 and 2010.The result shows that there is a significant negative correlation between the Mainland China banking market concentration and bank profit. And the result between the Taiwan banking market concentration and bank profit is opposite. In addition, bank profit is also affected by the impact of the macroeconomic, bank size and bank assets, liquidity and other factors.