Competition, Liberalization and EfficiencyEvidence from a Two-Stage Banking Model on Banks in Hong Kong and Singapore外文原文.pdf

Managerial Finance 52 Competition, Liberalization and Efficiency: Evidence from a Two-Stage Banking Model on Banks in Hong Kong and Singapore by Guan H. Lim and Dipinder S. Randhawa, Department of Finance Accounting, NUS Business School, National University of Singapore, 1 Business Link, Singapore 117592, Singapore Abstract Hong Kong and Singapore are economically similar and rival international financial cen- ters. Banks in both Hong Kong and Singapore operate in very similar environments: in- ternationally oriented with protected domestic banking market and firm regulators. With liberalization under the Financial Services Accord of the World Trade Organization (WTO), comes more competition and the growing importance for banks to ensure that they are X-efficient so as to compete successfully or risk being marginalized. This paper uses data envelopment analysis (DEA) to assess X-efficiency of banks in Hong Kong and Singapore via a two-stage (combining both the intermediation and production stages) banking model. Changes in X-efficiency over time are computed to determine if policy initiatives have facilitated improvements in efficiency. Our results on X-efficiency of banks demarcated by size and ownership provide valuable insights into the issues of scale economies and the impact of family ownership on X-efficiency. Key words: DEA, X-efficiency, banks 1. Introduction While domestic banks in Hong Kong and Singapore operate in very similar environ- ments, observers have long felt that Hong Kong banks are more innovative and competi- tive in terms of their intermediation roles whilst Singapore banks have placed more emphasis and achieved higher efficiency in mobilizing savings. Both Hong Kong and Singapore are essentially city-states. For a long time, both have marketed themselv