Deregulation, contestability and market structure for banks in Taiwan

Bibliographic Data

ID12550328
AuthorsChang-Sheng Liao (0000-0003-4501-6252, Fujian University of Technology, corresponding author)
Year2020
Volume27
Issue4
Pages620-639
Publication date2020-11-05
Open AccessNo
TypeARTICLE
VenueJournal of the Asia Pacific Economy (JOURNAL)
Journal identifiersISSN: 1354-7860 • E-ISSN: 1469-9648
PublisherRoutledge (PUBLISHER • GB)
DOI10.1080/13547860.2020.1843591
OpenAlexW3096715031
LanguageEN
Citations received1
References cited31

This is the first study to integrate structural and non-structural approaches into the evaluation of competitive conditions for banks in Taiwan. It is found that the results of structural and non-structural approaches are compatible. This study finds that market share may not have a significant impact on banks’ efficiency but may significantly impact profitability. This implies that banks are willing to sacrifice something to expand their market share, such as not enforcing minimum cost targets and wasting resources to raise an already unrealistic market share target. Furthermore, it is essential to pay attention to the observation that the degrees of competition deteriorated after the Global Financial Crisis (GFC). This argues that the transmission mechanism from market structure to performance occurring through product differentiation is able to exercise market power in banks products and earn supernormal profit, which is normally associated with dominant banks and not with collusive behaviour

Business · Competition (biology · Deregulation · Economics · Financial system · Industrial organization · Market economy · Market microstructure · Market power · Market share · Market share analysis · Market structure · Microeconomics · Monetary economics · Monopoly · Order (exchange · Profit (economics · Profitability index · Banking stability, regulation, efficiency · Corporate Finance and Governance · Global Financial Crisis and Policies · Finance

Tools

Open DOI