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Deregulation, Competition and Consumer Welfare in Banking Market: Evidence from Hong Kong

  • Chun-Yu Ho

    (Boston University, Hong Kong Institute for Monetary Research)

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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Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 242007.

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Length: 29 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:hkm:wpaper:242007
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