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Deregulation, competition and consumer welfare in a banking market: evidence from Hong Kong

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  • Chun-Yu Ho

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Abstract

This paper examines competition among commercial banks following deregulation in a small open economy. I jointly estimate a system of differentiated product demand and pricing equations, and use conduct parameters to identify market structure. The empirical results show that the banking sector is characterized by the Nash-Bertrand equilibrium in which bank size is important for product differentiation. Following deregulation, bank competition intensifies and cost efficiency improves.

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File URL: http://hdl.handle.net/10.1007/s11149-009-9106-3
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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 37 (2010)
Issue (Month): 1 (February)
Pages: 70-97

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Handle: RePEc:kap:regeco:v:37:y:2010:i:1:p:70-97

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Web page: http://www.springerlink.com/link.asp?id=100298

Related research

Keywords: Banking; Conduct parameters; Demand estimation; Nested logit; G21; L13;

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Citations

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Cited by:
  1. Ho, Chun-Yu, 2014. "Switching cost and deposit demand in China," BOFIT Discussion Papers 9/2014, Bank of Finland, Institute for Economies in Transition.
  2. Chun-Yu Ho, 2009. "Market Structure, Welfare, and Banking Reform in China," Working Papers 302009, Hong Kong Institute for Monetary Research.
  3. Chang, Shun-Chiao & Chang, Jui-Chuan Della & Huang, Tai-Hsin, 2012. "Assessing market power in the U.S. commercial banking industry under deregulation," Economic Modelling, Elsevier, vol. 29(5), pages 1558-1565.

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