scholarly journals Does market competition affect all banks equally? Empirical evidence on Montenegro

2021 ◽  
Vol 10 (2) ◽  
pp. 87-107
Author(s):  
Nina Vujanović ◽  
Nikola Fabris
Keyword(s):  
Panel Data ◽  
Credit Risk ◽  
Market Structure ◽  
Empirical Evidence ◽  
Financial Stability ◽  
Banking Sector ◽  
Market Competition ◽  
Market Concentration ◽  
Bank Stability ◽  
Market Shares

Abstract Bank stability is an important aspect of financial stability, especially in bank-centric systems like that of Montenegro. Hence, it is important to analyse risks affecting stability of both the banking and financial system as a whole. Rising competition among banks could pose a challenge and possibly change the level of credit risk, especially if the banks are small in size. This can affect both credit risk and financial stability. Small-sized banks could be the ones to react less nimbly to a changing market structure than bigger banks with stable market shares. This study tries to answer whether competition affects credit risk in Montenegro and whether banks differing in size react differently. Panel data techniques were applied to eleven banks which account for over 90 percent of the banking sector. The results indicate that market concentration could be particularly harmful when it comes to credit risk of small-sized banks, while large-sized banks are less affected. Overall, the increasing competition may positively affect credit risk in Montenegro.

scholarly journals The Determinants of Banking Performance

2015 ◽  
Vol 4 (2) ◽  
pp. 21-28
Author(s):  
Khalfaoui Hamdi ◽  
Moufida Ben Saada
Keyword(s):  
Panel Data ◽  
Stock Market ◽  
Empirical Study ◽  
Credit Risk ◽  
Banking Sector ◽  
Disclosure Of Information ◽  
Main Determinants

This paper aims to identify the determinants of performance of the Tunisian banking sector. The results found, following an empirical study using panel data of Tunisian banks listed on the stock market over the period 2000-2013, show that credit risk, liquidity, total assets and disclosure of information relating to credit are the main determinants of banking performance

Risk Behavior, Country Governance, and Bank Stability in Pakistan

2021 ◽  
pp. 185-203
Author(s):  
Hafiz Waqas Kamran ◽  
Abdelnaser Omran
Keyword(s):  
Economic Growth ◽  
Credit Risk ◽  
Risk Behavior ◽  
Commercial Banks ◽  
Financial Stability ◽  
Operational Risk ◽  
Bank Stability ◽  
Regression Methods ◽  
The Stability ◽  
Control Of Corruption

Keeping risk behavior and country governance in observation, this study has investigated the trends in financial stability for a sample of 22 commercial banks in Pakistan while controlling the effect of economic growth. Over the period of 2007 to 2016, the authors have applied OLS, FE, and RE regression methods to investigate which risk and governance factors are influencing the stability measures of the banks. It is found that financial stability in overall banks is affected by credit risk, operational risk, country risk, and financial crisis risk while control of corruption is also affecting ZROA in an adverse way.

Market structure-performance hypothesis in Kenyan banking industry

2015 ◽  
Vol 10 (4) ◽  
pp. 697-710 ◽  
Author(s):  
Solomon W. Giorgis Sahile ◽  
Daniel Kipkirong Tarus ◽  
Thomas Kimeli Cheruiyot
Keyword(s):  
Market Structure ◽  
Market Efficiency ◽  
Market Share ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Developing Economies ◽  
Market Concentration ◽  
Bank Performance ◽  
Content Type

Purpose – The purpose of this paper is to test market structure-performance hypothesis in banking industry in Kenya. Specifically, the structure-conduct-performance (SCP) and market efficiency hypotheses were examined to determine how market concentration and efficiency affect bank performance in Kenya. Design/methodology/approach – The study used secondary data of 44 commercial banks operating from 2000 to 2009. Three proxies to measure bank performance were used while market concentration and market share were used as proxies for market structure. Market concentration was measured using two concentration measures; the concentration ratio of the four largest banks (CR4) and Herfindahl-Hirschman Index, while market share was used as a proxy for efficiency. The study made use of generalized least square regression method. Findings – The empirical results confirm that market efficiency hypothesis is a predictor of firm performance in the banking sector in Kenya and rejects the traditional SCP hypothesis. Thus, the results support the view that efficient banks maximize profitability. Practical implications – The study provides insights into the role of efficiency in enhancing profitability in commercial banks in Kenya. It has managerial implication that profitable banks ought to be efficient and dispels the notion of collusive behavior as a precursor for profitability. Originality/value – The paper fills an important gap in the extant literature by proving insights into what determines bank profitability in banking sector in Kenya. Although this area is rich in research, little work has been conducted in the developing economies and in particular no study in the knowledge has addressed this critical issue in Kenya.

COMPETITION-STABILITY RELATIONSHIP IN DUAL BANKING SYSTEMS: EVIDENCE FROM EFFICIENCY-ADJUSTED MARKET POWER

2021 ◽  
pp. 1-24
Author(s):  
MUDEER AHMED KHATTAK ◽  
OMAR ALAEDDIN ◽  
MOUTAZ ABOJEIB
Keyword(s):  
Market Power ◽  
Financial Stability ◽  
Banking Sector ◽  
Market Competition ◽  
Policy Implications ◽  
Islamic Banks ◽  
Banking Competition ◽  
Precise Measure ◽  
Conventional Banks ◽  
The Impact

This research attempts to explore the impact of banking competition on financial stability employing a more precise measure of market power. It was found that Islamic banks are less stable and are enjoying lower market power. The analysis shows that higher market competition makes the banking sector vulnerable to defaults, supporting the “competition-fragility view”. This research finds no difference in the relationship for Islamic banks indicates that Islamic banks might be involved in traditional banking activities as conventional banks. The results are consistent and robust to different estimation approaches and subsamples. This research carries regulatory and policy implications.

scholarly journals MARKET COMPETITION AT THE LEVEL OF AGRICULTURAL PRODUCTS DISTRIBUTION

THE BULLETIN ◽  
2021 ◽  
Vol 3 (391) ◽  
pp. 40-44
Author(s):  
N. A. Gerasymchuk ◽  
L.M. Stepasyuk ◽  
Z.M. Titenko ◽  
I.M. Yermolenko
Keyword(s):  
Market Structure ◽  
Market Share ◽  
Agricultural Sector ◽  
Market Competition ◽  
Market Concentration ◽  
Agricultural Products ◽  
Competitive Environment ◽  
Modern Business ◽  
High Level ◽  
Almost All

The article proved that in the context of European integration, the intensification of competition between producers becomes a major factor of the consolidation and unification of various economic entities, because this is one of the main ways to increase competitiveness, which in turn leads to market concentration. The investigation of the market structure, its type, and hence the economic processes occurring in it, is directly related to determining the state of the competitive environment, its assessment and study of the possibilities of restricting or developing competition. The article reveals the basic principles of development of agricultural enterprises, highlights the problems and prospects of their development in a competitive environment. The importance of concentration indicators in the context of the relationship between monopoly power and the level of concentration of sellers in the market is substantiated. Methodological aspects of using the market concentration index and the Herfindahl-Hirschman index are analysed; their advantages, disadvantages and possibilities of use in the process of market structure research, its type, state of competitive environment and degree of monopolization are revealed. In the process of research the concentration of agricultural markets, it was found that there was a moderate level in almost all types of products in Ukraine, only the pork market is highly concentrated. Analysis of the competitiveness of agricultural products shows that a significant market share is occupied by crops such as sunflower and corn. Studies show that there are certain types of products that have a high level of profitability, including rapeseed and barley, but they occupy a small market share. It is established that to ensure competitive production of agricultural products requires state support of the industry through the provision of tax and credit benefits to enterprises that implement modern business methods. Further prospects for the development of the agricultural sector in Ukraine have been identified.

FINANCIAL LITERACY AND FINANCIAL INCLUSION EFFECTS ON STABILITY AND COMPETITIVENESS INDICATORS IN THE BANKING SECTOR: CROSS COUNTRY EVIDENCE FOR AFRICA AND THE WORLD

2021 ◽  
pp. 2150009
Author(s):  
JOÃO JUNGO ◽  
MARA MADALENO ◽  
ANABELA BOTELHO
Keyword(s):  
Credit Risk ◽  
Interest Rates ◽  
Financial Institutions ◽  
Financial Literacy ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial Education ◽  
Financial Inclusion ◽  
The Stability ◽  
The Impact

Financial inclusion has allowed financial products with very high-interest rates and complex conditions to become increasingly affordable. Financial inclusion programs, which aim to reach all social strata, strongly expose financial institutions to risk and particularly credit risk. That said, additional interventions such as financial education of those included are needed. We aim to examine the impact of financial literacy and financial inclusion of households on bank performance. Specifically, we want to examine the impact of financial literacy on credit risk, competitiveness among banks and financial stability. The FGLS estimation results suggest that financial literacy and financial inclusion reduce credit risk and enhance the stability of banks, and regarding competitiveness, our results were inconclusive as they show different effects for each competitiveness indicator, although they point to improved competitiveness in some cases. This research allows policymakers to understand that individual financial attitudes can be reflected in the general welfare of financial institutions and encourages the intensification of programs aimed at improving household financial literacy.

Structure and Food Price Inflation

2017 ◽  
Vol 16 (1) ◽  
Author(s):  
Ilya Rahkovsky ◽  
Richard Volpe
Keyword(s):  
Market Structure ◽  
Price Index ◽  
Consumer Price Index ◽  
Market Concentration ◽  
Food Prices ◽  
Food Price ◽  
Retail Market ◽  
Food Markets ◽  
Price Inflation ◽  
Market Shares

AbstractWe pair Nielsen TDLinx data, 2004–2014, with Consumer Price Index data to investigate how changes in food retail market structure drive food price inflation. We find, in corroboration with much of the evidence to date, that market concentration is positively and significantly associated with higher food prices. We find the same to be true for store format concentration, or the homogeneity of food markets. As the market shares, or penetration, of supercenters, warehouse stores, limited assortment stores, and superettes increase at expense of traditional supermarkets, food price inflation decreases.

scholarly journals Emprical Analysis of Competition Dynamics in Turkish Banking via Competition Determination Approaches

2013 ◽  
Author(s):  
Utku Altunöz
Keyword(s):  
Panel Data ◽  
Market Structure ◽  
Banking Sector ◽  
Banking System ◽  
Regression Method ◽  
Competitive Behavior ◽  
Market Conditions ◽  
Business World ◽  
Panel Data Regression ◽  
Data Regression

Due to the complex and close interaction of banks with other economic units, any trouble in banking sector might have repercussion on the whole economy which makes the market structure and competition in banking sector as a cynosure. Business world is facing gradually increasing competition. It seems that the existence of firms depends on the power and the advantage of their competitiveness. The purpose of this study is to analyze the competition structure and the market conditions of Turkish banking system. despite the existence of a number of studies about competition in banking sector, there is still a lack of the studies which has been done with Lerner's Index. Due to this fact, Lerner’s Indeks is used in this study. Bank level determinants of Lerner Index is analysed using Panel Data Regression Method and was reached to factors effecting competitive behavior in Turkish Banking Sector.

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