A social‐ecological model aided by an adversarial methodology was employed to study the regulation of private nursing homes in Hong Kong over a five‐year period. Specifically the study addresses the way quality of care and its definitions changed in response to shifting socio‐political‐economic conditions. The study began when only 2 percent of the industry was licensable. It was found that an initial period of harmful capture was replaced by a period of cooperation between government and the industry, following increased resource flow into the system that made it possible for desirable trade‐offs to occur between the two parties. Six‐and‐a‐half years after the introduction of the regulatory ordinance, all homes in the market achieved licensure status. Copyright © 2003 Blackwell Publishing Ltd.