This paper tests the competition structure of Hong Kong’s banking industry using the Panzar-Rosse approach and a panel dataset of the largest 20 banks in Hong Kong from 1998 to 2011. The estimation results showed that the competitive pressures were equal across time and across the different sizes of the banks in Hong Kong’s banking industry. Competitive pressures may heighten in the near future as banks will seek to gain competitive edge and they can do so through mergers and acquisitions. Regulations are also slowly being relaxed after the financial crisis in order to boost the economy and more advances in technology are also anticipated.
Chu, L. Y., Cui, Y., Ye, N., & Yan, Y. (2013). Competition in Hong Kong’s banking industry. Lingnan Journal of Banking, Finance and Economics, 4. Retrieved from http://commons.ln.edu.hk/ljbfe/vol4/iss1/6