THE TESTS OF STRUCTURE-CONDUCT-PERFORMANCE AND EFFICIENCY-STRUCTURE HYPOTHESES FOR KOREA SECURITIES INDUSTRY

Autor: IL HOON PARK, 朴一勳
Rok vydání: 2001
Druh dokumentu: 學位論文 ; thesis
Popis: 89
The intensive process of financial integration, together with the profound transformation that has taken place around the world. Keeping up with this trend, Korea securities industry has become a much more competitive market after a period of intense and continuous liberalization. This trend is expected to continue as regulations fall, competition from foreign securities firms picks up and in response to the general globalization of markets. The existing literature on Korea securities industry has centered on the analysis of scale and scope economies under the implicit assumption that all firms are efficient. On the contrary, very few studies have focused on efficiency analysis, in spite of the fact that the greatest potential gains on costs are obtained by eliminating existing inefficiencies rather than trying to reach the adequate size and scope of financial intermediaries (Domenech,1992; Grifell and Lovell,1993). First, this paper uses cost frontier methodology from distribution free approach (Schmidt and Sickles, 1984) to estimate X-efficiency - whether securities firms are using their inputs efficiently - for a sample of Korea securities firms between 1997 and 2000. Four outputs include brokerage commissions, trading income, underwriting revenue and interest income. Three input variables are as following, price of labor, price of fixed capital and price of borrowed funds (Clark, 1996). The second part of this paper attempts to identify whether structure-conduct-performance (SCP) hypothesis or efficiency-structure (EFS) hypothesis is applied to Korea securities industry through applying X-inefficiency as efficiency factor (Goldberg and Rai, 1996) This paper shows that there is a significantly positive relationship between market structure and market performance through a firm’s conduct that support SCP hypothesis in Korea securities industry. While there is little support that performance is a result of superior X efficiency. This would suggest that government merger policy should not as a rule being influenced by claims of expected cost efficiency benefits from mergers. Keywords : X-efficiency; Mergers and Acquisitions; SCP hypothesis; EFS hypothesis
Databáze: Networked Digital Library of Theses & Dissertations
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