Competition, diversification and performance in dual banking
A panel VAR analysis
Bibliographic Data
| ID | 15066913 |
|---|---|
| Authors | Fazelina Sahul Hamid (0000-0002-9140-9789, Universiti Sains Malaysia, corresponding author), Mansor H Ibrahim (0000-0003-0413-0075, School of Graduate and Professional, International Centre for Education in Islamic Finance (INCEIF), Kuala Lumpur, Malaysia) |
| Year | 2021 |
| Volume | 34 |
| Issue | 1 |
| Pages | 194-220 |
| Publication date | 2021-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economic Research-Ekonomska Istraživanja (JOURNAL) |
| Journal identifiers | ISSN: 1331-677X • E-ISSN: 1848-9664 |
| Publisher | Informa UK Limited (PUBLISHER • GB) |
| DOI | 10.1080/1331677x.2020.1782242 |
| OpenAlex | W3083410430 |
| Language | EN |
| References cited | 48 |
This article investigates the dynamic relationship among competition, diversification and bank performance using data for 18 countries with a dual banking system over the period 2000 to 2016. Analyses using panel vector autoregression (P.V.A.R.) model, impulse response function (I.R.F.) and variance decomposition (V.D.C.) methods confirm that market power increases the profitability and the stability of banks the dual banking system while revenue diversification reduces them. Market power increases revenue diversification of banks. Segregating the sample of banks into emerging and developing countries, we find that positive impact of market power on profitability is stronger for emerging countries. Even though we find that revenue diversification has a more damaging effect on the profitability of banks in the developing countries, it only dampens the stability of banks in emerging countries. In addition, we find that asset diversification dampens the stability of banks. However, it has a more positive impact on the profitability of banks in emerging economies
Business · Econometrics · Economics · Emerging markets · Financial system · Lerner index · Market economy · Market power · Monetary economics · Panel data · Profitability index · Revenue · Variance decomposition of forecast errors · Banking stability, regulation, efficiency · Corporate Finance and Governance · Islamic Finance and Banking Studies · Finance
Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models
Financial development and dynamic investment behavior
Another look at the instrumental variable estimation of error-components models
The Efficiency Cost of Market Power in the Banking Industry
The Price-Concentration Relationship in Banking
| Highly cited | No |
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