IDEAS home Printed from https://ideas.repec.org/a/taf/recsxx/v25y2022i1p242-259.html
   My bibliography  Save this article

Role of bank competition in determining liquidity creation: evidence from GCC countries

Author

Listed:
  • Shoaib Ali
  • Imran Yousaf
  • Sumayya Chughtai
  • Syed Zulfiqar Ali Shah

Abstract

This study aims to investigate the impact of banking-sector concentration on the banks’ liquidity creation in GCC countries over the period from 2012 to 2018 by using a dynamic GMM panel procedure. The results suggest that increased bank competition reduces banks’ liquidity creation across the GCC countries. The study’s findings are in line with the ‘financial fragility hypothesis” according to which banks to reduce their lending activities when competition is high in the market. The evidence suggests that the banking industry is different from others, and pro-competitive policies in the banking industry can reduce liquidity provision by banks. In the context of policy implications, a concentrated banking system discourages capital provision to firms; hence, regulators have to take appropriate measures to resolve the problem of a reduced supply of capital. Government must regulate the banking sector by keeping in view their long-run goal as competition is a double-edged sword in banking.

Suggested Citation

  • Shoaib Ali & Imran Yousaf & Sumayya Chughtai & Syed Zulfiqar Ali Shah, 2022. "Role of bank competition in determining liquidity creation: evidence from GCC countries," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 242-259, December.
    • Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:242-259
    DOI: 10.1080/15140326.2022.2043114
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15140326.2022.2043114
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15140326.2022.2043114?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Changjun Zheng & Sinamenye Jean-Petit, 2023. "The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability," SAGE Open, , vol. 13(2), pages 21582440231, June.
    2. Douglas A. Adu, 2022. "Competition and bank risk-taking in Sub-Saharan Africa countries," SN Business & Economics, Springer, vol. 2(7), pages 1-26, July.
    3. Beylem Çelik & Gökhan Özer & Abdullah Kürşat Merter, 2023. "The Effect of Ownership Structure on Financial Reporting Timeliness: An Implementation on Borsa Istanbul," SAGE Open, , vol. 13(4), pages 21582440231, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:242-259. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/recs .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.