Do you have credit cards? The expansion of the credit card market in Taiwan

Abstract

This article discusses the expansion of credit cards in Taiwan. The intention of the study is (1) to compare the performance of various diffusion models, such as logistic models, Fourier models and autoregressive models; (2) to identify the important explanatory factors regarding the expansion of the credit card market in Taiwan. The data set comprised annual data regarding the number of credit cards in circulation between 1991 and 2005. Empirical results show that the diffusion rate increased with per capita Gross Domestic Product (GDP), but decreases with number of banks and net savings. The rate of market penetration for the number of credit cards in circulation will reach 204.3% of the population.

Keywords:

• credit cards in circulation
• diffusion model
• market penetration rate

JEL Classification:

• C22

Acknowledgement

This work was supported by the National Science Council in Taiwan under grant number NSC 95-2118-M130-001.