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China¡¯s Banking System, Market Structure, and Competitive Conditions

Author

Listed:
  • Omar Masood

    (Business School, University of East London, Docklands Campus, University Way, London E16 2RD, UK)

  • Bruno S. Sergi

    (Business School, University of Messina, Messina 98122, Italy)

Abstract

This paper presents an empirical assessment of the market structure and the competitive conditions of the Chinese banking sector. We applied the Panzar-Rosse H-statistic on the data collected from a panel including 16 most significant Chinese banks for the period 2004¨C2007. Equilibrium tests and the competitive conditions tests were applied on the data. From the pooled regression in the whole period, we found that the banking sector in China for 2004¨C2007 was monopolistically competitive. We also show that the Chinese banks were not able to achieve high records of profitability in monopolistically competitive markets.

Suggested Citation

  • Omar Masood & Bruno S. Sergi, 2011. "China¡¯s Banking System, Market Structure, and Competitive Conditions," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 6(1), pages 22-35, March.
    • Handle: RePEc:fec:journl:v:6:y:2011:i:1:p:22-35
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-011-0120-x
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    Citations

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    Cited by:

    1. Jian Xue & Di Zhu & Laijun Zhao & Chenchen Wang & Hongyang Li, 2019. "Redundancy Identification and Optimization Scheme of Branches for Sustainable Operation of Commercial Banks," Sustainability, MDPI, vol. 11(15), pages 1-19, July.
    2. Xiangyi Zhou & Zheng Pei & Botao Qin, 2021. "Assessing Market Competition in the Chinese Banking Industry Based on a Conjectural Variation Model," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 73-98, March.
    3. Memić Deni, 2015. "Banking Competition and Efficiency: Empirical Analysis on the Bosnia and Herzegovina Using Panzar-Rosse Model," Business Systems Research, Sciendo, vol. 6(1), pages 72-92, March.
    4. Tan, Yong & Floros, Christos, 2018. "Risk, competition and efficiency in banking: Evidence from China," Global Finance Journal, Elsevier, vol. 35(C), pages 223-236.

    More about this item

    Keywords

    Panzar-Rosse H-statistic; regression; equilibrium tests; competition;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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