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

Mensi, Sami; Labidi, Widede

doi:10.3844/ajebasp.2015.185.193

Cited by 13 publications

(20 citation statements)

References 53 publications

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“…Several studies have employed Z-Score as a measure of financial stability. Such studies include: Amidu and Wolfe (2013), Ferná ndez, A. I., Gonzalez F. and Suarez N. (2014), Mensi and Labidi (2015), and Soedarmono, W., Machrouh F. & Tarazi A. (2011).…”

Section: Empirical Literaturementioning

confidence: 99%

Monetary Policy and Financial Stability in the Nigerian Banking Industry

Chukwudi¹,

Henry²

2019

IJFR

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This study examined the impact of monetary policy on financial stability in the Nigerian banking industry for the period 2008Q1 to 2016Q2, using an error correction model. Banking industry financial stability index (BIFSI) was computed within the study and was used as a measure of financial stability in the Nigerian banking industry. The study discovered that the impact of monetary policy on financial stability in the Nigerian banking industry was weak. It also revealed a significant long run equilibrium relationship between monetary policy and financial stability in the Nigerian banking industry with a speed of adjustment to long run equilibrium of 66.54%. It was concluded that open market operation and exchange rate channels are more effective channels of transmitting monetary policy to financial stability in the banking industry, than interest rate channel.

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Section: Empirical Literaturementioning

confidence: 99%

Monetary Policy and Financial Stability in the Nigerian Banking Industry

Chukwudi¹,

Henry²

2019

IJFR

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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%

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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“…Therefore, they face greater risks and create financial instability. There is some evidence from the research to support this view, including Jayakumar et al (2018), Yusgiantoro et al (2018), Cuestas et al (2017), Mensi and Labidi (2015), Soedarmono et al (2011), Jiménez et al (2010 Beck et al (2006), and Keeley (1990).…”

Section: The Impact Of Market Power On Banks' Financial Stabilitymentioning

confidence: 97%

“…Maudos and Guevara (2011) combined Herfindahl-Hirschman index and Lerner index. Lerner index is also calculated in the researches of Ariss (2010), Soedarmono (2011), Agoraki (2011, Mensi and Labidi (2015) and Yusgiantoro et al (2018). Cuestas et al (2017) also used Lerner index, but combine with market share.…”

Section: The Impact Of Market Power On Banks' Financial Stabilitymentioning

confidence: 99%

Does banking market power matter on financial stability?

Sang¹,

Hong²,

Hoang³

et al. 2020

10.5267/j.msl

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This study investigates the impact of market power on bank financial stability using bank-level data from 24 banks in Vietnam over the 2008-2017 period. In order to measure the degree of market power in the Vietnam banking sector, we compute the separated Lerner index by fixed effect model, random effect model, and Zscore as a measure of financial stability. We use the static and dynamic panel data regression methods to estimate the relationship between market power and financial stability. Our results support the "competitionstability" view and show that Vietnamese commercial banks facing little competition tended to be less stable. We also find that size had a positive effect on stability while loan growth rate had a negative effect on financial stability. The study suggests some important policy implications for improving bank stability in Vietnam.

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

Cited by 13 publications

References 53 publications

Monetary Policy and Financial Stability in the Nigerian Banking Industry

Monetary Policy and Financial Stability in the Nigerian Banking Industry

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

Does banking market power matter on financial stability?

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