Bank competition, stability, and intervention quality

Kanas, Angelos; Al‐Tamimi, Hussein A. Hassan; Albaity, Mohamed; Mallek, Ray Saadaoui

doi:10.1002/ijfe.1680

Cited by 22 publications

(21 citation statements)

References 85 publications

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“…The Lerner index indicates that there is a positive and then negative link with NPL, and the opposite is true with the LZScore. NPL and the LZScore results confirm both competition‐stability and competition‐fragility for the GCC economies or a U‐shaped non‐linear relationship, similar to González et al (2017), Noman et al (2017) and Albaity et al (2019) and Kanas et al (2019). On the other hand, the Boone indicator suggested that with the LZScore, that the higher the competition, the lower the bank stability, confirming competition‐fragility in the GCC countries.…”

Section: Discussionsupporting

confidence: 81%

“…The bank stability measures BS i,j,t included in this study are; the Non‐Performing Loan (hereafter NPL) ratio and the LZScore (the natural logarithm of the Zscore). We have used these two proxies to measure bank stability, following previous literature, such as Kasman and Kasman (2015), Shijaku (2017), Noman et al (2018), Kanas, Al‐Tamimi, Albaity, and Mallek (2019) and Albaity et al (2019). The lag coefficient corresponds to how the rate of bank stability in the previous period influences the current period.…”

Section: Econometric Methodologymentioning

confidence: 99%

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Does competition lead to financial stability or financial fragility for Islamic and conventional banks? Evidence from the GCC countries

et al. 2020

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This paper investigates the nexus between stability and competition in the banking sector of the Gulf Cooperation Council. We examined a sample of 75 banks over the period 2006–2016. We found a U‐shaped relationship between bank stability and competition suggesting competition‐stability and competition‐fragility nexus. Banking concentration was found to affect instability negatively, which supported the “too important to be bailed out” view. Furthermore, we found that Islamic banks were less stable compared to conventional banks. We also found that bank size, profitability and capital regulation increase bank stability. In addition, the stock market return and the level of debt‐to‐GDP increase instability while the growth in oil price increase stability. Our findings are relevant to regulators to impose or release restrictions that boost financial stability.

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Section: Discussionsupporting

confidence: 81%

Section: Econometric Methodologymentioning

confidence: 99%

Does competition lead to financial stability or financial fragility for Islamic and conventional banks? Evidence from the GCC countries

et al. 2020

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“…The semi-parametric GAM analysis was implemented to capture non-linear relationships among the study variables. This model, unlike linear analysis, offers non-restrictive flexible variables specifications that improve the estimation process and better reflect market fluctuations (Kanas et al , 2019), especially for stock returns in emerging markets. This model applies a non-restrictive flexible function for f 1 ( INFOQ ), while other control variables are entered into the equation using the linear format.…”

Section: Methodsmentioning

confidence: 99%

The International Financial Reporting Standards 9 financial instruments, information quality and stock returns in the modern technology era

ElKelish

2021

JAAR

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PurposeThis paper investigates the relationship between information quality and stock returns during the International Financial Reporting Standards (IFRS 9) pre-adoption announcements and examines the influence of modern technology on these relationships across 24 emerging countries.Design/methodology/approachThis paper conducts an event study using data obtained from the DataStream, Osiris, International Telecommunication Union (ITU) and the World Bank databases from 2009 to 2014. The non-linear generalized additive model (GAM) was implemented to test the study hypotheses.FindingsResults indicate a significant positive non-linear relationship between low information quality and stock returns during IFRS 9 pre-adoption announcements. This result implies that IFRS 9 announcements have a positive impact on corporations with low pre-adoption quality information. This result is also more pronounced in small rather than large corporations and financial rather than nonfinancial institutions. Furthermore, modern technology plays a significant decisive antecedent role, while industry type has a moderating effect on the relationship between information quality and stock returns. The codified legal system has a positive impact on stock returns across emerging countries.Research limitations/implicationsData unavailability in some emerging countries.Practical implicationsThe empirical evidence provides useful guidelines for corporate managers, investors, international accounting standard-setters and regulators to improve financial reporting practices.Originality/valueThis paper extends the work of Armstrong et al. (2010); Onali et al. (2017) by including the impact of non-linear relationships using GAM analysis and the role of modern technology across emerging countries.

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“…ROA measures a firm's success in using its assets to generate earnings (Selling and Stickney, 1989). Previous studies have found a significant negative relationship between the ROA and NPLs (Kanas et al, 2019). Therefore, ROA was controlled for in this study.…”

Section: Npl Ratio ¼ Npl Gross Loansmentioning

confidence: 98%

Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

Masoud

Albaity

2021

JES

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PurposeThis study examines the effect of general trust (GT) and confidence in banks (CIB) on bank risk-taking. Besides, it explores the moderating role of CIB on the relationship between GT and bank risk-taking.Design/methodology/approachSecondary data was obtained from the World Value Survey, World Bank and BankFocus from 2011 to 2018. Two-step system GMM estimator was used to examine the links between the GT and CIB with bank risk-taking in MENA region.FindingsResults indicated that both GT and CIB negatively influenced bank risk-taking. Moreover, CIB weakened the negative relationship between GT and bank risk-taking. However, the results were different for MENA region as compared to the full sample.Originality/valueThe studies on the link between trust and bank risk-taking are either carried out on an international sample or using a developed economies sample. However, the authors believe that developing economies might exhibit different relationships due to cultural and structural differences present in developed countries. Besides, the authors believe that testing the moderating effect of CIB could shed more light on the differences between developing and developed countries.

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Bank competition, stability, and intervention quality

Cited by 22 publications

References 85 publications

Does competition lead to financial stability or financial fragility for Islamic and conventional banks? Evidence from the GCC countries

Does competition lead to financial stability or financial fragility for Islamic and conventional banks? Evidence from the GCC countries

The International Financial Reporting Standards 9 financial instruments, information quality and stock returns in the modern technology era

Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

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