The Study of Conjectural Variation of Banking Firm and Economics Scale of Banking in Taiwan

• Main Authors: Lin, Hsien-Ching, 林羨菁
• Other Authors: Lin, Jyh-Horng
• Format: Others
• Language: zh-TW
• Published: 1995
• Online Access: http://ndltd.ncl.edu.tw/handle/21327073291868955771

碩士 === 淡江大學 === 金融研究所 === 83 === 　　During the liberalization and internationalization of the financial market, its industrial structure and environments in Taiwan are undergoing a drastic change. For achieving an outstanding performance and possessing the advantage among competitors, each bank tries to establish more and more branch offices in order to enlarge its market share. Therefore, scales of economies becomes one of the main factors concerned by banking institutee when they consider executing any branch extending plan. 　　Besides, because that the current banking industry in Taiwan may have the feature of oligopoly market; as a consequence, the author employs the model of oligopoly market to investigate the issue of scales of economics in banking industry. The author attempts to provide empirical study evidences as references for government and bankers when they take into account new policy or program. 　　In the present study, product function analysis is employed to establish a translog function with two input factors. The model assumes that this product function equation is consistent with the requirement of homogeneity, constacy of elementary price and technique, in order to investigate the scales of economics of banking industry in Taiwan. This study also attempts to establish Conjectural Variation Model, Cournot Model, and Cost Minimization Model, respectively, and then find out if there will be different results produced by the analyses of the above three models. 　　The present study finds that all three oligopoly market models lead to similar conclusions : Taiwan''s banking industry indeed has the features of scale of economies. However, the scores of measuring scale of economies by three models are quite different, especially the Cournot Model appears more deviant from the other two That is because that, under the assumptions of Courtnot Model, bankers'' prediction about other competitors'' output policy doesn''t covary with output. Therefore, due to underestimating the response of bankers towards other competitors'' output change, the Cournot Model overestimates Taiwan''s scale of economies.