The relationship between market share, customer satisfaction and financial performance
Table of content
Abstract 3
1. INTRODUCTION 3
1.1 Background of the Study 3
1.2 Rationales of the research 4
1.3 Objective of the Study 5
1.4 Research hypotheses 5
1.5 Dissertation structure 6
2. LITERATURE REVIEW 6
2.1 Introduction 6
2.2 Theoretical Review 6
2.2.1 The study on the financial performance 6
2.2.2 Research on the impact of market share on financial performance 9
2.2.3 Research on the impact of customer satisfaction on financial performance 11
3. RESEARCH METHODOLOGY 13
3.1 Introduction 13
3.2 Research Design 14
3.2.1 Correlation analysis 14
3.2.2 Linear regression model 15
3.3 Target Population 15
3.4. Variable definition 16
3.4 Data Collection Procedures 17
4. DATA ANALYSIS, FINDINGS AND DISCUSSION 17
4.1 Introduction 17
4.2 Descriptive statistics 17
4.3 Correlation analysis 19
4.3 Findings 19
4.4 Discussion 21
Summary of findings 21
Discussion 22
5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 24
5.1 Introduction 24
5.2 Conclusions 24
5.3 Recommendations 25
5.4 Suggestions for Future Research 25
6. Reference 27
Abstract
This study had the objective of evaluating the relationship that exists between market share, customer satisfaction and financial performance. The target population of this study was the 7 commercial banks in China as at 31st December 2016. The panel data to be used was data from 2014 to 2016. This study used secondary data which was collected from the CSMAR (China Stock Market & Accounting Research). The methodology of this empirical study are correlation analysis and multiple regression model. Study findings indicate market share has positively significant effects on financial performance for commercial banks in China. However, there was no significant relationship between customer satisfaction and financial performance for commercial banks in China. The recommendations from this study include taking possible efficacy of mergers and acquisitions to improve the market share.
1. INTRODUCTION
1.1 Background of the Study
With the rapid development of the economics of China and the gradual improvement of the capital market, listed companies have become increasingly prominent in the national economy. Thus, people pay much more attention to the firm performance. Firm performance is the effectiveness and efficiency of the company's production and operation, which is the comprehensive reflection of profitability, solvency, operational capacity, growth capacity, and social contribution capabilities (Chi & Gursoy, 2009). Financial performance is a core part of firm performance. On the other hand, the pursuit of market share and customer satisfaction are the effective way for enterprises to increase profits. The profits are the most important part of the firm performance. Thus, the effects of customer satisfaction and market share on firm performance have gained attention in recent theoretical and empirical work. Firm market share and customer satisfaction are constructs of scholarly interest since they traditionally have much explanatory power, and an understanding of their importance can be vital for managers who operate in today’s competitive environments. In other words, this research will focuses on multiple performance measures in Chinese enterprises are at the stage of experiments and explorations. In specific, this study aims to conduct empirical research by using systematic and complete data to investigate the effect of market share and customer satisfaction on firm financial performance in the financial service industries.
1.2 Rationales of the research
This research will provide important theoretical and practical significance for the objective and fair evaluation on the financial performance of listed companies.
Theoretical Significance
Vickery et al. (2003) and Brammer & Millington (2008) in the economics field have offered a variety of models for analyzing financial performance. However, little consensus has emerged on
