New evidence on assessing the level of competition in the European Union banking sector: A panel data approach

Apergis, Nicholas; Fafaliou, Irene; Polemis, Michael

doi:10.1016/j.ibusrev.2015.07.003

Cited by 40 publications

(40 citation statements)

References 26 publications

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“…It is generally used as a measure of competition, which is based on the new industrial organization empirical literature and based on the available bank-level data designating the level of bank competition. Additionally, it offers a quantitative assessment of the competitive condition of the market under market equilibrium and this technique has been applied by a number of empirical studies (Claessens and Laeven 2004;Yeyati and Micco 2007;Bikker et al 2012;Apergis et al 2016). The explanation of this model (H-statistics) is also very clear, which takes a value from −∞ to +1, where a higher value of this model indicates greater competition in the financial market and vice versa.…”

Section: Measuring the Bank Competitionmentioning

confidence: 99%

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

Chen

Nazir

Hashmi

et al. 2019

JRFM

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This unique study examines the interactive role of bank competition and foreign bank entry in explaining the risk-taking of banks over the globe. We used cross-country data for the banking sector from 2000 to 2016. Using the pooled regression model and Two-stage Least Squares model (2SLS with Generalized Method of Moments GMM), we document that foreign bank entry decreases the risk-taking behavior of the banks to a certain level and exhibits an inverted U-shaped relation with financial stability. Furthermore, the joint effect of bank competition and foreign bank entry brings financial fragility because host banks tend to make risky investments due to undue competition induced by foreign bank entry. We support the competition–fragility hypothesis when foreign bank entry goes beyond a certain threshold. Our results also suggest that restrictions on bank activities and capital regulation stringency reduce the level of the risk factor. We also applied various robustness tests, which further confirm our mainstream results. Our findings have policy implications for foreign investors and regulatory authorities.

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Section: Measuring the Bank Competitionmentioning

confidence: 99%

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

Chen

Nazir

Hashmi

et al. 2019

JRFM

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“…Unfortunately, the European banking sector is far from competitive (Apergis et al 2016). Due to economies of scale and scope, aggregate market shares of 80% or more for the five largest banks in a country are not uncommon (ECB 2017, p. 32).…”

Section: The Role Of Banksmentioning

confidence: 99%

The Entrepreneurial Society

Sanders

Elert

Henrekson

2019

International Studies in Entrepreneurship

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“…The second group of studies examines the competitive conditions in the EU during a period including a few years both before and after the introduction of the euro, which was introduced in 1999 but entered into circulation in 2002. For this reason, some studies (Apergis et al 2016;Sun 2009) consider 2000 as the end year of the pre-EMU period and 2001 as the start year of the after-EMU period.…”

Section: Around the Introduction Of The Euromentioning

confidence: 99%

Bank Competition and Credit Risk in Euro Area Banking: Fragmentation and Convergence Dynamics

Karadima

Louri

2020

JRFM

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Consolidation in euro area banking has been the major trend post-crisis. Has it been accompanied by more or less competition? Has it led to more or less credit risk? In all or some countries? In this study, we examine the evolution of competition (through market power and concentration) and credit risk (through non-performing loans) in 2005–2017 across all euro area countries (EA-19), as well as core (EA-Co) and periphery (EA-Pe) countries separately. Using Theil inequality and convergence analysis, our results support the continued existence of fragmentation as well as of divergence within and/or between core and periphery with respect to competition and credit risk, especially post-crisis, in spite of some partial reintegration trends. Policy measures supporting faster convergence of our variables would be helpful in establishing a real banking union.

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New evidence on assessing the level of competition in the European Union banking sector: A panel data approach

Cited by 40 publications

References 26 publications

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

Bank Competition, Foreign Bank Entry, and Risk-Taking Behavior: Cross Country Evidence

The Entrepreneurial Society

Bank Competition and Credit Risk in Euro Area Banking: Fragmentation and Convergence Dynamics

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