Market Competition Structure Measurement of China's Banking Sector Based on Bresnahan Model

Since the adoption of finance system reform,great changes have taken place in the market structure and market competition of China's banking sector.This paper modifies Bresnahan model based on market equilibrium theory,and uses the sample data of 14 commercial banks from 1995 to 2004 to build up a panel data model,and empirically examines the competition structure of China's banking sector. The result shows that China's banking sector has a market structure of obvious monopolistic competition from 1995 to 2004 and becomes more competitive after 1999;The market structure of four state-owned commercial banks is monopolistic competition and the degree of competition is high;Competition among the ten joint-stock commercial banks is obviously lower than that among the four state-owned commercial banks.