Advanced Search
MyIDEAS: Login to save this article or follow this journal

The market structure of the banking sector and financially dependent manufacturing sectors

Contents:

Author Info

  • Hoxha, Indrit

Abstract

I explore the effect of the structure of the banking market on the performance of manufacturing sectors. The theoretical papers offer ambiguous explanations regarding the effects of banking market structure on the size of manufacturing sectors, and empirical studies that use cross country data do not reach a consensus on these effects. By using the Panzar–Rosse method to estimate a “H-statistic” competition index and conventional concentration indices, I provide evidence that industries that rely more on external financing perform better in countries where the banking competition is lower, and the banking concentration is greater.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S1059056013000051
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 27 (2013)
Issue (Month): C ()
Pages: 432-444

as in new window
Handle: RePEc:eee:reveco:v:27:y:2013:i:c:p:432-444

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620165

Related research

Keywords: Banking concentration; Banking competition; Value added; Manufacturing sectors; Economic growth;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," NBER Working Papers 5879, National Bureau of Economic Research, Inc.
  2. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
  3. Simeon Djankov & Caralee McLiesh & Andrei Shleifer, 2005. "Private Credit in 129 Countries," NBER Working Papers 11078, National Bureau of Economic Research, Inc.
  4. Rafael La Porta & Florencio Lopez-deSilanes & Andrei Shleifer, 2000. "Government Ownership of Banks," Harvard Institute of Economic Research Working Papers 1890, Harvard - Institute of Economic Research.
  5. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," NBER Working Papers 5661, National Bureau of Economic Research, Inc.
  6. Emilia Bonaccorsi Di Patti & Giovanni Dell'Ariccia, 2003. "Bank competition and firm creation," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 481, Bank of Italy, Economic Research and International Relations Area.
  7. Shaffer, Sherrill, 1983. "Non-structural measures of competition : Toward a synthesis of alternatives," Economics Letters, Elsevier, vol. 12(3-4), pages 349-353.
  8. Valta, Philip, 2012. "Competition and the cost of debt," Journal of Financial Economics, Elsevier, Elsevier, vol. 105(3), pages 661-682.
  9. Benjamin M. Tabak & Dimas M. Fazio & Daniel O. Cajueiro, 2010. "The Effects of Loan Portfolio Concentration on Brazilian Banks' Return and Risk," Working Papers Series, Central Bank of Brazil, Research Department 215, Central Bank of Brazil, Research Department.
  10. Mark G. Guzman, 2000. "Bank structure, capital accumulation and growth: a simple macroeconomic model," Economic Theory, Springer, Springer, vol. 16(2), pages 421-455.
  11. Lensink, Robert & Hermes, Niels, 2004. "The short-term effects of foreign bank entry on domestic bank behaviour: Does economic development matter?," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 553-568, March.
  12. Ross Levine & Sara Zervos, . "Stock markets, banks and economic growth ," CERF Discussion Paper Series 95-11, Economics and Finance Section, School of Social Sciences, Brunel University.
  13. Raymond Fisman & Inessa Love, 2004. "Financial Development and Intersectoral Allocation: A New Approach," Journal of Finance, American Finance Association, American Finance Association, vol. 59(6), pages 2785-2807, December.
  14. Raymond Fisman & Inessa Love, 2003. "Trade Credit, Financial Intermediary Development, and Industry Growth," Journal of Finance, American Finance Association, American Finance Association, vol. 58(1), pages 353-374, 02.
  15. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
  16. Pierre-Richard AgÈnor, 2003. "Benefits and Costs of International Financial Integration: Theory and Facts," The World Economy, Wiley Blackwell, vol. 26(8), pages 1089-1118, 08.
  17. Nicola Cetorelli & Michele Gambera, 1999. "Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data," Center for Financial Institutions Working Papers, Wharton School Center for Financial Institutions, University of Pennsylvania 00-19, Wharton School Center for Financial Institutions, University of Pennsylvania.
  18. Antonio Ciccone & Elias Papaioannou, 2006. "Adjustment to target capital, finance and growth," Economics Working Papers 982, Department of Economics and Business, Universitat Pompeu Fabra.
  19. Allen N. Berger & Iftekhar Hasan & Leora F. Klapper, 2004. "Further evidence on the link between finance and growth: An international analysis of community banking and economic performance," Finance, EconWPA 0404017, EconWPA.
  20. Stijn Claessens & Luc Laeven, 2005. "Financial Dependence, Banking Sector Competition, and Economic Growth," Journal of the European Economic Association, MIT Press, MIT Press, vol. 3(1), pages 179-207, 03.
  21. Nicola Cetorelli, 2004. "Real effects of bank competition," Working Paper Series, Federal Reserve Bank of Chicago WP-04-03, Federal Reserve Bank of Chicago.
  22. Micco, Alejandro & Panizza, Ugo & Yañez, Monica, 2006. "Bank Ownership and Performance Does Politics Matter?," POLIS Working Papers, Institute of Public Policy and Public Choice - POLIS 62, Institute of Public Policy and Public Choice - POLIS.
  23. Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
  24. Alli Nathan & Edwin H. Neave, 1989. "Competition and Contestability in Canada's Financial System: Empirical Results," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 576-94, August.
  25. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 1999. "A new database on financial development and structure," Policy Research Working Paper Series 2146, The World Bank.
  26. Raghuram G. Rajan & Luigi Zingales, 1996. "Financial Dependence and Growth," NBER Working Papers 5758, National Bureau of Economic Research, Inc.
  27. Nicola Cetorelli & Philip E. Strahan, 2004. "Finance as a Barrier to Entry: Bank Competition and Industry Structure in Local U.S. Markets," NBER Working Papers 10832, National Bureau of Economic Research, Inc.
  28. Robert Marquez, 2002. "Competition, Adverse Selection, and Information Dispersion in the Banking Industry," Review of Financial Studies, Society for Financial Studies, vol. 15(3), pages 901-926.
  29. Levine, Ross, 1999. "Law, Finance, and Economic Growth," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 8(1-2), pages 8-35, January.
  30. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
  31. Gormley, Todd A., 2010. "The impact of foreign bank entry in emerging markets: Evidence from India," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 19(1), pages 26-51, January.
  32. Beatriz de Blas & Katheryn Niles Russ, 2010. "All Banks Great, Small, and Global: Loan pricing and foreign competition," NBER Working Papers 16029, National Bureau of Economic Research, Inc.
  33. Robert DeYoung & William C. Hunter & Gregory F. Udell, 2003. "The past, present, and probable future for community banks," Working Paper Series, Federal Reserve Bank of Chicago WP-03-14, Federal Reserve Bank of Chicago.
  34. Sanyal, Paroma & Shankar, Rashmi, 2011. "Ownership, competition, and bank productivity: An analysis of Indian banking in the post-reform period," International Review of Economics & Finance, Elsevier, Elsevier, vol. 20(2), pages 225-247, April.
  35. Zarutskie, Rebecca, 2006. "Evidence on the effects of bank competition on firm borrowing and investment," Journal of Financial Economics, Elsevier, Elsevier, vol. 81(3), pages 503-537, September.
  36. Jayaratne, Jith & Strahan, Philip E, 1998. "Entry Restrictions, Industry Evolution, and Dynamic Efficiency: Evidence from Commercial Banking," Journal of Law and Economics, University of Chicago Press, vol. 41(1), pages 239-73, April.
  37. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-56, June.
  38. Scharler, Johann, 2008. "Bank lending and the stock market's response to monetary policy shocks," International Review of Economics & Finance, Elsevier, Elsevier, vol. 17(3), pages 425-435.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lis-Gutiérrez, Jenny-Paola, 2013. "Medidas de concentración y estabilidad de mercado. Una aplicación para Excel
    [Market concentration and market stability measures. An application for Excel]
    ," MPRA Paper 47615, University Library of Munich, Germany.
  2. Iveta Repková & Daniel Stavárek, 2014. "Concentration and Competition in the Banking Sector of Turkey," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(36), pages 625, May.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:27:y:2013:i:c:p:432-444. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.