Banking competition, banking stability, and economic growth: Are feedback effects at work?

2018 ◽  
Vol 96 ◽  
pp. 15-41 ◽  
Author(s):  
Manju Jayakumar ◽  
Rudra P. Pradhan ◽  
Saurav Dash ◽  
Rana P. Maradana ◽  
Kunal Gaurav
Keyword(s):  
Economic Growth ◽  
Banking Competition ◽  
Feedback Effects ◽  
Banking Stability

Does bank competition promote economic growth? Empirical evidence from selected South Asian countries

2019 ◽  
Vol 8 (2) ◽  
pp. 201-223 ◽  
Author(s):  
Bijoy Rakshit ◽  
Samaresh Bardhan
Keyword(s):  
Economic Growth ◽  
South Asian ◽  
Financial Stability ◽  
Joint Effect ◽  
Bank Competition ◽  
Banking Competition ◽  
Content Type ◽  
Lerner Index ◽  
Asian Economies ◽  
Banking Stability

Purpose Bank competition and financial stability are often cited as important drivers of economic growth. Bank competition plays a very significant role in enhancing the efficiency and determining the stability of a financial system. However, a question of interest is whether bank competition enhances or hindrances the economic growth of a country. The purpose of this paper is to investigate the role of bank competition and financial stability on economic growth for selected South Asian economies over the period 1997–2016. Design/methodology/approach To investigate whether bank competition enhances or hinders economic growth, the author applies a two-step estimation technique. First, the author estimates bank competition using the Lerner index and adjusted Lerner index and, second, examines the joint effect of bank competition and financial stability on economic growth applying both panel regression model and system GMM techniques. Findings Empirical findings reveal that the banking sector in South Asian economies is competitive as indicated by the estimated values of Lerner and adjusted Lerner index. Moreover, the joint effect defined by the interaction between banking competition and banking stability also reveals a positive and significant impact on economic growth. This finding implies that both banking competition and banking stability are significant long-term determinants of economic growth in South Asian economies. Practical implications This paper suggests flexible banking regulation policies such as low net interest rate margins, lesser activity restrictions and entry of foreign banks along with few contestability measures to increase bank competition in South Asian countries. This is because as higher the competition, greater is the chance for efficient allocation of resources and hence economic growth. Originality/value This paper is the first of its kind that considers the joint role of bank competition and financial stability on economic growth. The application of a semi-parametric approach in the estimation of marginal cost is also a unique contribution to empirical literature.

Asset bubbles, banking stability and economic growth

2019 ◽  
Vol 78 ◽  
pp. 108-117 ◽  
Author(s):  
Shengquan Wang ◽  
Langnan Chen ◽  
Xiong Xiong
Keyword(s):  
Economic Growth ◽  
Asset Bubbles ◽  
Banking Stability

scholarly journals An Analysis of the Potential of Manufacturing and Services Sectors as Drivers of Economic Growth and Development in Namibia

2015 ◽  
Vol 1 (2) ◽  
pp. 167
Author(s):  
Ronald T. Chifamba ◽  
Ojijo Odhiambo
Keyword(s):  
Economic Growth ◽  
Manufacturing Industries ◽  
Cge Model ◽  
Meat Processing ◽  
Business Services ◽  
Feedback Effects ◽  
Grain Milling ◽  
Key Industries ◽  
Backward Linkages ◽  
Backward And Forward Linkages

The purpose of this paper is to analyse the potential of the manufacturing and services sectors as drivers of economic growth in Namibia. The paper uses the intersectoral linkage analysis method to identify the industries with the greatest backward and forward linkages. The economy-wide impact of these industries is simulated further using a CGE model. The greatest backward linkages for manufacturing industries were found in meat processing, fish processing, grain milling, basic metals and construction. The greatest backward linkages for the tertiary industries were found in trade and repairs, hotels and restaurants, finance and insurance, and other private services. The greatest forward linkages for manufacturing industries were found in paper and printing, chemicals and rubber, fabricated metals and machinery, and electricity generation and distribution. The greatest forward linkages for tertiary industries were found in transport, communication, finance and insurance, and market real estate and business services. These, therefore, are the sectors that policies could target as they have greatest impact and could enable Namibia to achieve higher levels of growth. Further, simulation results are obtained from a CGE model by introducing direct exogenous increases in the output of the perceived key industries and examining the economy-wide feedback effects.

The interaction between economic growth in the EU and South‐East Asia

1995 ◽  
Vol 95 (2) ◽  
pp. 40-47
Author(s):  
Mokhtar M. Metwally
Keyword(s):  
Economic Growth ◽  
East Asian ◽  
Simultaneous Equation ◽  
Equation Model ◽  
South East Asia ◽  
Simultaneous Equation Model ◽  
Asian Countries ◽  
Feedback Effects ◽  
Asian Economy ◽  
The Eu

Develops and tests a simultaneous equation model to assess the effect of growth in exports to the EU on the economic development of five South‐East Asian countries. Emphasizes the role played by economic interdependence and estimates the degree of feedback effects between each Asian economy and the EU.

Entrepreneurship, economic growth, and innovation: Are feedback effects at work?

2014 ◽  
Vol 67 (5) ◽  
pp. 825-829 ◽  
Author(s):  
Miguel-Ángel Galindo ◽  
María Teresa Méndez
Keyword(s):  
Economic Growth ◽  
Feedback Effects

Banking competition and economic growth: cross-country evidence

2011 ◽  
Vol 17 (8) ◽  
pp. 739-764 ◽  
Author(s):  
Juan Fernández de Guevara ◽  
Joaquin Maudos
Keyword(s):  
Economic Growth ◽  
Banking Competition ◽  
Cross Country

scholarly journals Banking Competition and Economic Growth: 2006-2015 Case of Rwanda

2020 ◽  
Vol 1 (3) ◽  
pp. 513-522
Author(s):  
Faustin Maniraguha
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Unit Root ◽  
Growth And Development ◽  
Unit Root Test ◽  
Cointegration Test ◽  
Banking Competition ◽  
Correction Model ◽  
Economic Growth And Development ◽  
Short Run

It has been argued that a competitive and efficient financial sector is a prerequisite for economic growth and development. The objective of this study therefore was to determine the influence of bank competition on economic growth in Rwanda for the period 2006 - 2015.The study used Error Correction Model after conducting Unit Root Test(ADF) and Cointegration Test(Johansen) so that to check the degree of adjustment in the short run. The results revealed that Credit to GDP is highly significant and this implied that there is a need to set the policy influencing credit distribution in order to influence economic growth. In addition disequilibrium found in the short run is corrected quarterly at 70.32%.

scholarly journals NEXUS OF COMPETITION AND STABILITY: CASE OF BANKING IN INDONESIA

2016 ◽  
Vol 18 (3) ◽  
pp. 333-350
Author(s):  
Tri Mulyaningsih ◽  
Anne Daly ◽  
Riyana Miranti
Keyword(s):  
Structural Changes ◽  
Bank Lending ◽  
Method Of Moment ◽  
Economic Stability ◽  
Banking Competition ◽  
Efficiency Increase ◽  
Banking Stability ◽  
Moment Approach ◽  
Generalized Method Of Moment ◽  
The Relationship

This paper analyzes the relationship between banking competition and banking stability in Indonesia, where the bank lending is the major source of funding on this country with a series of structural changes including deregulation, economic crisis, and consolidation. We apply generalized method of moment approach on individual bank data, and the result shows that competitive banking will increase the economic stability. Under a competitive industry, banks must improve their efficiency, increase their loans disbursement, diversify their business, boost their assets and enhance their capitalization. This paper emphasize that the efficiency is a critical to reduce risk, both for large and small banks. Furthermore, regardless their size, an adequate capital is an important factor for the bank to cope with shocks in the market

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