Market power and merger activity in Taiwan banking

Tsai-Lien Yeh

International Journal of Financial Services Management, 2009, vol. 4, issue 1, 21-37

Abstract: This paper analyses the market power of the Taiwan banking industry, by employing a dynamic economic error-correcting model. The main result is that banks are competitive and the degree of competition is stronger in the short run compared to the long run. Our empirical studies also show that the Taiwan banking industry increased market power after undertaking merger activities. Mergers can increase the size of banks, and large banks are more competitive. We also find that the dynamic Error Correction Model (ECM) analysis offers an appropriate method by which to study market power issues, while the static model, from the statistical perspective, seems inappropriate.

Keywords: bank markets; market power; mergers and acquisitions; ECM; error correction models; Taiwan; banking industry (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=26634 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijfsmg:v:4:y:2009:i:1:p:21-37

Access Statistics for this article

More articles in International Journal of Financial Services Management from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().