China's Financial Services Industry: The Intra-Industry Effects of Privatization of the Bank of China Hong Kong
Posted: 30 Mar 2011 Last revised: 1 Jan 2014
Date Written: October 17, 2008
The purpose of this paper is to discuss and apply some of the key issues and lessons from similar privatization in other parts of the world to the partial privatization of the Bank of China Hong Kong (BOCHK). The empirical results of this paper indicate that some of the banks and non-bank financial institutions reacted negatively to the partial privatization announcements of the BOCHK. The empirical results also show that HSBC, the largest bank in Hong Kong had no significant reaction to the restructuring announcement or the listing announcement of the BOCHK. However, the Hang Seng Bank, the third largest bank in Hong Kong, suffered a loss after the announcement of the BOCHK listing. Compared with the banks and non-bank financial institutions in China, the BOCHK over-performed the rival firms in Mainland China one year after its partial privatization.
Keywords: G15, G25
JEL Classification: privatization, ownership and control, financial institutions' reactions
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