Industrial Organization deals with the study of the behavior of firms in the market, linked to the names of Edward S. Mason (1939, 1949) and Joe S. Bain (1951, 1956), to seek how the structural characteristics of an industry determine the behavior of the firms that, in turn, yields market performance. This framework of analysis is the SCP paradigm. This paper empirically examines the 13 financial ratios classified into 5 categories. The sample includes the data of public traded companies listed both on Taiwan Stock Exchange and GreTai Securities Market: 14 securities subsidiaries of financial holding company and 8 independent securities firms between 2008 and 2012. In this study, significant difference exists in profitability between securities subsidiaries of financial holding company and independent securities firms in net profit margin and earnings per share. In the respect of financial structure, there is also significant difference in long-term capital over fixed assets ratio. As to liquidity, significant difference exists in current ratio and quick ratio. In the respect of operating ability, significant difference exists in fixed asset turnover rate. The result indicates that the performance of securities subsidiaries of financial holding company is superior to independent securities firms.
