Market Structure, Welfare, and Banking Reform in China

Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 30/2009

Journal of Comparative Economics, Volume 40, Issue 2, May 2012, Pages 291–313

45 Pages Posted: 21 Jun 2010 Last revised: 6 Sep 2022

Multiple version iconThere are 3 versions of this paper

Date Written: September 30, 2009

Abstract

This working paper was written by Chun-Yu Ho (Georgia Institute of Technology).

This paper examines the effects of market deregulation on consumers and state commercial banks in China, a large developing country. I jointly estimate a system of differentiated product demand and pricing equations under alternative market structures. While China's banking reforms overall have achieved mixed results, the consumer surplus of the deposit market has increased. The welfare effects from reforms are unevenly distributed, with losses skewed toward inland provinces and certain consumer groups. There is no clear evidence that the pricing of banking services has become more competitive after the reform, and such pricing remains subject to government intervention. Encouragingly, the price-cost margins of some state commercial banks have fallen over time.

Keywords: Banking Reform, Banks in China, Demand Estimation, Market Structure

JEL Classification: G21, L11

Suggested Citation

Institute for Monetary and Financial Research, Hong Kong, Market Structure, Welfare, and Banking Reform in China (September 30, 2009). Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 30/2009, Journal of Comparative Economics, Volume 40, Issue 2, May 2012, Pages 291–313, Available at SSRN: https://ssrn.com/abstract=1627995 or http://dx.doi.org/10.2139/ssrn.1627995

Hong Kong Institute for Monetary and Financial Research (Contact Author)

(HKIMR) ( email )

Units 1005-1011, 10th Floor, One Pacific Place
88 Queensway
Hong Kong
China

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
86
Abstract Views
1,495
Rank
148,531
PlumX Metrics