Competition and commercial banks risk-taking: evidence from Sub-Saharan Africa region

Abstract

This study investigates the relationship between competition and the risk-taking attitude of banks. We test how this relationship manifests in the Sub-Saharan African(SSA) region's commercial banks in light of the competition-fragility view, using the generalised methods of moments. We studied 440 commercial banks in 37 SSA countries over the period 2006-2015. The results provide evidence that supports a positive relationship between competition and banks' overall risk as well as their credit risk but suggests that off-balance sheet risk reduces with competition. We, therefore, conclude that the propensity to undertake higher risk in a competitive banking environment largely accounts for fragility as argued in the competitionfragility view.

Measuring and Integrating Risk Management into Green Innovation Practices for Green Manufacturing under the Global Value Chain

“…Manage risk and cost-related risk as well as environmental, technical, and market risk [48][49][50] Environmental risk, technology risk, management risk, and market risk [51,52] Technology risk, market risk, transportation capacity, competition risk, and policy risk [53,54] Risk characteristics Technology risk, management risk, and marketing risk [55,56] Technology risk, manufacturing risk, market risk, management risk, and financial risk [57,58] Technology risk, market risk, cooperative risk, financial risk, and institutional risk [59,60] Risk processes Development risk, manufacturing risk, and marketing risk [61,62] Research risk, manufacturing risk, and market service risk [63] Development risk, manufacturing risk, and market risk [64] The classification of the risk management process by the International Standards Association, American Project Management Organization, Australian And New Zealand Standards, and American Sponsor Committee is basically the same, including environmental analysis, risk identification, risk assessment, risk response, and risk internal control [65][66][67][68]. For identifying green innovation risk, the flowchart method, fault tree method, and scenario analysis method are usually used.…”

“…The green innovation risk of the manufacturing industry has the following characteristics [48][49][50][51][52][53][54][55][56][57][58][59][60][61][62][63][64]. (i) Each stage of green innovation in the manufacturing industry faces various risks.…”

“…The risk of green innovation is defined as the possibility of the suspension, termination, or failure of green innovation activities due to the uncertainty of the external environment of green innovation and the lack of the strength of the enterprises implementing green innovation on the basis of R&D clean energy and development of energy-saving and emission reduction technologies, as well as the losses caused. R&D risks stem from changes in personnel, finance, technology, and green policies in the R&D process [51][52][53][54][55][56][57][58][59][60]. Manufacturing risk also involves personnel and financial risk, followed by production risk [55][56][57][58]61,62].…”

“…Once the funding chain breaks, R&D activities will be suspended or failed, and the green technology will gradually lose its advantage and eventually be overtaken by competitors. On the one hand, the leading level, maturity level, and difficulty level of green technology directly affect the success or failure of green R&D [54]. On the other hand, the short life cycle means that the utilization value of green technology does not exist for a long time, which leads to the benefits of green R&D that cannot make up for the costs [56][57][58].…”

“…Because the green technology is easy to be replaced, the impact of the replacement technology accelerates the elimination of green technology. Many studies have pointed out that the success rate of green technology transfer is positively correlated with green R&D [51][52][53][54][55][56], and the failure is caused by the insufficient strength or immature technology of the party providing the technology. Poor protection of intellectual property also poses a risk to green R&D. Intellectual property rights ensure that enterprises have sufficient incentive to innovate products to gain benefits.…”