Bank Market Structure and Performance in Taiwan Before and After the 1991 Liberalization

Anthony H. Tu and Shen-Yuan Chen
Additional contact information
Anthony H. Tu: National Chengchi University, Taipei, Taiwan, R.O.C.
Shen-Yuan Chen: Ming Chuan University, Taipei, Taiwan, R.O.C.

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2000, vol. 03, issue 04, 475-490

Abstract: Two competing hypotheses regarding market structure and the performance of firms are the traditional "structure-conduct-performance" (SCP) hypothesis, in which high concentration lowers the cost of collusion and earns monopoly rents, and the "efficiency" hypothesis, which emphasizes the operating efficiency of particular firms. In this paper, we present the results from testing both the hypotheses in the context of Taiwan's banking market. Our goal is to understand the effect of the 1991 liberalization policy by examining whether market structure and firm performance in this industry differ in the periods before and after the 1991 revisions to the Banking Act. Prior to the 1991 revisions, our results do not support either the SCP or the efficiency hypothesis for Taiwan's banking industry. The industry's market structure seems to exhibit a kind of "quiet-life" competing environment. The results for the period after the 1991 revisions tend to support the competing efficiency hypothesis. Our findings suggest that the 1991 revisions to the Banking Act have stimulated competition and brought about an emphasis on efficiency in Taiwan's banking industry.

Keywords: Bank Market Structure; Bank Performance; The Revisions of Banking Act (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219091500000236
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:wsi:rpbfmp:v:03:y:2000:i:04:n:s0219091500000236

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219091500000236

Access Statistics for this article

Review of Pacific Basin Financial Markets and Policies (RPBFMP) is currently edited by Cheng-few Lee

More articles in Review of Pacific Basin Financial Markets and Policies (RPBFMP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().