Competition and bank profitability

Yuanita, Nuraini

doi:10.1186/s40008-019-0164-0

Cited by 25 publications

(19 citation statements)

References 15 publications

(19 reference statements)

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“…This research only uses a measure of market power based on market share and does not involve other bank-specific factors as well as macroeconomic factors. Future studies are expected to be able to use other measures of market power such as the Herfindahl Hirschman Index, Lerner index, Panzar-Rosse H-statistics Yuanita (2019) as well as other bank-specific factors such as capital ratios, interest income, and bank ownership, as well as macroeconomic factors such as inflation and gross domestic product (GDP) as a control variable.…”

Section: Limitation and Suggestionsmentioning

confidence: 99%

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Market Power and Bank Liquidity Risk: Implementations of Basel III using Net Stable Funding Ratio Approach

Fadli

Sakti

Jumono

2021

J. Keuang. dan Perbank.

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Net Stable Funding Ratio (NSFR) published by Basel III as a new standard of bank liquidity risk management. In Indonesia, the Financial Services Authority (OJK) issued the OJK Regulation No. 50/POJK. 03/2017 concerning the obligation to fulfill the NSFR for commercial banks. The research objective is to test the influence of bank market power of assets, loans, and third-party funds toward bank's liquidity risk that measured by NSFR. The research uses a data panel from 37 commercial banks in Indonesia in the period 2018Q1-2019Q4. The hypotheses are examined by using linear regression methods with a random effect model. The result shows that the effect of market power on the risk of bank liquidity is proved. Market power will increase the NSFR, which means the higher the market power, the better management of liquidity risk. This research is expected to contribute theoretically to provide the latest literature on the application of Basel III through the NSFR approach, a current measurement for bank liquidity risk. Furthermore, this research is expected to contribute practically to banks and regulators in the formulation of policies related to market control and bank liquidity risk management. Based on the result, financial consolidation to enhance market power can be a solution to encourage bank liquidity.

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Section: Limitation and Suggestionsmentioning

confidence: 99%

“…These approaches are called the Lerner index, the H-statistic/Panzar-Rosse method, and the Bresnahan Model (Yuanita, 2019).…”

Section: Introductionmentioning

confidence: 99%

Market Power and Bank Liquidity Risk: Implementations of Basel III using Net Stable Funding Ratio Approach

Fadli

Sakti

Jumono

2021

J. Keuang. dan Perbank.

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“…Further discussed on the endogeneity in the model, as suggested Yuanita (2019), it could be appeared the correlation between the observation matrix (the regressors) and the error terms. To correct the endogeneity, generalized method of moments (GMM) should be potentially performed (Arellano & Bond, 1991;Mensi & Labidi, 2015;Yuanita, 2019). Table 2 shows the descriptive statistics of the research variables.…”

Section: Regression Methodsmentioning

confidence: 99%

“…Referring to the study of factors affecting competitive capacity of commercial banks, there have many types of researches in terms of both theoretical and empirical. Theoretically, numerous studies have given many theoretical frameworks related to competitive capacity of banks such as theory of Berger et al (2008), Elsas et al (2010) Yuanita (2019), and Kamran et al (2020). These studies aim to discuss the factors that can impact the market power of a bank in the specific countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Factors Affecting the Competitive Capacity of Commercial Banks: A Critical Analysis in an Emerging Economy

Dao¹,

Pham²,

Nguyen³

2020

IJFR

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This research was conducted to investigate the factors influencing the commercial bank’s competitive capacity in an emerging country. Data were collected from the domestic-owned commercial banks and foreign-owned commercial banks listed on Vietnam’s Stock Exchange over the period of nine years from 2010 to 2018. Three statistic approaches were employed to address econometrics issues and to improve the accuracy of the regression coefficients: Pooled Ordinary Least Square (Pooled OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). To correct the diagnostics and endogeneity in the model, the study uses Generalized Least Square (GLS) and Generalized Method of Moments (GMM). In order to account for the degree of competitive capacity we use Lerner index. Results demonstrate that the impact of bank-specific characteristics on market power in banks is statistically significant, and there are substantial distinguishments of economic consideration among these factors. In addition, a bank with a higher level of competitive capacity in the previous year will outstandingly generate competitive capacity in the current year. Another possibility, a greater level foreign investment into the banks in the host country could further encourage competitive capacity in the banking system. Finally, economic growth rate has no impact on competitive capacity at a significant level of 5% while a positive effect from inflation on bank’s market power could be found.

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“…Today, banks are at the central of helping the wheels of an economic turnaround in every country, including Indonesia. According to Yuanita [1], The banking industry is one of the main sources of finance for the Indonesian economy. Banks have played many roles for economic sustainability, so it is not surprising that there are many studies on the banking sector and its mechanisms.…”

Section: Introductionmentioning

confidence: 99%

Bank Performance in Profitability Dimensions: What External Factors and Why Does It Affect?

Indriastuti¹,

Muharam²

2020

Proceedings of the 3rd International Conference on Banking, Accounting, Management and Economics (ICOBAME 2020)

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Performance in a company is an indicator of a company is working well or not, as well as banking. Bank performance is influenced by internal and external factors. Internal factors is a condition under the control of bank management, meanwhile external factors are outside the control of bank management. The dimensions of bank performance in this research focus on profitability and its influence from external factors. The profitability we use is RoA (Return on Assets) and RoE (Return on Equity). The purpose of this research is to make a basis for thinking and to find out how influential external factors in the macroeconomic realm are on bank performance in order to make effective and efficient solutions. The research method used is a literature study using secondary data from various journals and related articles. The results of the study explain that there are 3 (three) external factors that are often the topic of discussion, namely inflation, economic growth (GDP), and interest rates. Inflation does not really have an effect on RoE, but it does have an effect on RoA. On economic growth (GDP), RoE has a positive effect on GDP, as well as RoA which has a positive relationship. The interest rate also has a positive effect on RoE. Likewise with RoA which has a positive effect on interest rates. It is hoped that this research can become a reference in seeing what external factors in the macroeconomic can affect bank performance in terms of profitability.

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Competition and bank profitability

Cited by 25 publications

References 15 publications

Market Power and Bank Liquidity Risk: Implementations of Basel III using Net Stable Funding Ratio Approach

Market Power and Bank Liquidity Risk: Implementations of Basel III using Net Stable Funding Ratio Approach

Factors Affecting the Competitive Capacity of Commercial Banks: A Critical Analysis in an Emerging Economy

Bank Performance in Profitability Dimensions: What External Factors and Why Does It Affect?

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