Bank market power, economic growth and financial stability: Evidence from Asian banks

Soedarmono, Wahyoe; Machrouh, Fouad; Tarazi, Amine

doi:10.1016/j.asieco.2011.08.003

Cited by 154 publications

(123 citation statements)

References 36 publications

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“…The data concerning the variables measuring financial stability are fully reproduced from ChienChiang et al (2014); Amidu and Wolfe (2013) ;Ariss, (2010); Soedarmono et al (2011;2013); Boyd et al (2006) and Uhde and Heimeshoff (2009). They measured Z-score as an index to evaluate the soundness of the banking market.…”

Section: Datamentioning

confidence: 99%

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The Effect of Diversification of Banking Products on the Relationship between Market Power and Financial Stability

Mensi¹,

Labidi²

2015

American Journal of Economics and Business Administration

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Abstract:In the context of financial liberalization, increased competition has spurred financial institutions to develop new products and new activities in order to meet demand, market development and increased competitiveness. This has made the relationship between market structure and financial stability more complicated and its study through the channel of diversification remains an unexplored area. The purpose of this paper is to test the interaction between market power, diversification and financial (in) stability. To this end, we examine a sample of 18 countries in the MENA region and 157 commercial banks during the period 2000-2013. Supporting the "competition-instability" hypothesis, our results revealed that low market power banks in the MENA region are less robust and more unstable when they less or poorly diversify their activities. Moreover, financial instability in this sector may result from a fierce competition among banks born from the desire to distinguish themselves by offering various nontraditional products, for which banks lack the experience to control its risks.

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Section: Datamentioning

confidence: 99%

“…Several studies have used to this index like those of De ; Maudos and De Guevara (2007), Berger et al (2009), Ariss (2010 and Soedarmono et al (2011;2013).…”

Section: Operationalizing Key Variables Market Powermentioning

confidence: 99%

The Effect of Diversification of Banking Products on the Relationship between Market Power and Financial Stability

Mensi¹,

Labidi²

2015

American Journal of Economics and Business Administration

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“…This can cause instability in the banking industry itself, which will make a great impact on the stability of the country's financial system (Kocabay, 2009). One of the triggers of the financial markets' instability over the last few years is the fact that the banking sector takes excessive risks to be able to maintain profitability in a highly competitive market (Soedarmono et al, 2011). The Asian financial crisis, occurring in 1997-1998, made many banks in some ASEAN countries, such as Indonesia, Thailand, Malaysia and the Philippines, become bankrupt.…”

Section: Resultsmentioning

confidence: 99%

“…The Asian financial crisis, occurring in 1997-1998, made many banks in some ASEAN countries, such as Indonesia, Thailand, Malaysia and the Philippines, become bankrupt. Responding to the phenomena, there were changes in the supervision structure and regulation of the banking sector of ASEAN countries (Soedarmono et al, 2011).…”

Section: Resultsmentioning

confidence: 99%

Competition and Cooperation in Economics and Business

Husodo¹,

Gitaharie²,

Gani³

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Although all care is taken to ensure integrity and the quality of this publication and the information herein, no responsibility is assumed by the publishers nor the author for any damage to the property or persons as a result of operation or use of this publication and/or the information contained herein. Business -Gani et al. (Eds) © 2018 Taylor & Francis Group, London, ISBN 978-1-138-62666-9 v Business -Gani et al. (Eds) © 2018 Taylor & Francis Group, London, ISBN 978-1-138-62666-9 ix Preface This book is one of the five volumes of proceedings that provides an opportunity for readers to engage with selected papers presented at the 1st Asia-Pacific Forum for Research in Social Sciences and Humanities (1st APRISH) conference held in Depok (Indonesia) on November 7-9, 2016. Quoting the theme of the conference "Competition and Cooperation in the Globalized World," this book would be a valuable contribution to get a better understanding of the future global challenges. Readers will find a broad range of research reports on topics ranging from globalization, poverty, population and some macroprudential perspectives on managing the risk of a more integrated world. One of the unique and valuable dimensions of this conference is the capability for blending the chemistries among educators, students, and researchers from around the world to discuss globalization in a broad spectrum. The reader will discover both common challenges and creative solutions emerge from very diverse settings. The relevance of the conference's theme, towards an evidence-based society, for a variety of disciplines, is reflected in the diverse range of papers that have been submitted for publication. These serve to demonstrate the natural attraction of the conference for sharing ideas and findings within an international community. Overall, the conference was undoubtedly very successful. Plenary lectures and presentations were successfully bridging the gap between the different fields of social sciences, making it possible for non-experts in a given area to gain insight into new areas. Also, among the speakers there were some young scientists, namely, doctoral, master's and undergraduate students, who bring new perspectives to their fields. Terms of use: Documents in EconStor may Competition and Cooperation in Economics and Competition and Cooperation in Economics andThe editors would like to thank all those who have contributed to submit full papers for this conference. We rece...

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“…Following Soedarmono et al (2011), who study Asian banks, such countries include China, Hong Kong, India, Indonesia, Malaysia, Sri Lanka, South Korea, Taiwan, Thailand, Pakistan, Philippines, and Vietnam.…”

Section: Introductionmentioning

confidence: 99%

Loan Loss Provisions and Lending Behaviour of Banks: Asian Evidence During 1992-2009

et al. 2012

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Effects of loan loss provisioning on lending behaviour of banks remain a major concern in policy circles in order to strenghten both bank stability and financial intermediation. A sample of 686 commercial banks in Asian countries over the 1992-2009 period is used to identify factors contributing to the occurence of a procyclical effect of loan loss provisions on loan growth. Our empirical results highlight that non-discretionary provisions have a procyclical effect, as higher non-discretionary provisions reduce loan growth of banks. This procyclical effect holds for large banks but not small banks. A closer investigation shows that bank market structure, economic development and institutional quality also affect the link between non-discretionary provisions and loan growth of banks. More specifically, higher bank competition, higher per capita income and higher rule of law mitigate the procyclical effect of non-discretionary provisions on loan growth regardless of whether banks are large or small. These findings have policy implications concerning the adoption of the dynamic provisioning system for Asian banks.

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Bank market power, economic growth and financial stability: Evidence from Asian banks

Cited by 154 publications

References 36 publications

The Effect of Diversification of Banking Products on the Relationship between Market Power and Financial Stability

The Effect of Diversification of Banking Products on the Relationship between Market Power and Financial Stability

Competition and Cooperation in Economics and Business

Loan Loss Provisions and Lending Behaviour of Banks: Asian Evidence During 1992-2009

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