Measuring Competition and Stability: Recent Evidence for European Banking
AbstractThis paper uses a variety of structural and non-structural measures (including the Lerner index, Rosse-Panzar H-statistic and Profits-Persistence parameters) to gauge competitive conditions in 11 European banking systems over 1997 to 2008. As in Carbo et al (2009) we find that competition measures tend to provide inconsistent results and the measures are statistically unrelated. We also find that our banking sector risk measures (Z-score, loan-loss provisions, variation in ROE and ROA) are unrelated to the various competition measures. This raises doubts about the generality of the findings of previous empirical studies that investigate competition-stability and competition fragility issues.
Download InfoIf 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.
Bibliographic InfoPaper provided by Bangor Business School, Prifysgol Bangor University (Cymru / Wales) in its series Working Papers with number 10020.
Length: 32 pages
Date of creation: Oct 2010
Date of revision:
Competition; European Banking; NEIO; Risk; SCP; Stability;
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.:
- Suominen, Matti, 1994. " Measuring Competition in Banking: A Two-Product Model," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 96(1), pages 95-110.
- Turk Ariss, Rima, 2010. "On the implications of market power in banking: Evidence from developing countries," Journal of Banking & Finance, Elsevier, Elsevier, vol. 34(4), pages 765-775, April.
- Zuzana Fungacova & Laura Solanko & Laurent Weill, 2010.
"Market Power in the Russian Banking Industry,"
Working Papers of LaRGE Research Center, Laboratoire de Recherche en Gestion et Economie (LaRGE), UniversitÃ© de Strasbourg
2010-09, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
- Fungacova, Zuzana & Solanko, Laura & Weill, Laurent, 2010. "Market power in the Russian banking industry," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 3/2010, Bank of Finland, Institute for Economies in Transition.
- Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 1999. "Assessing competitive conditions in the Greek banking system," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 9(4), pages 377-391, November.
- Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, American Economic Association, vol. 72(1), pages 1-15, March.
- Coccorese, Paolo, 2004. "Banking competition and macroeconomic conditions: a disaggregate analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 14(3), pages 203-219, July.
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics, Elsevier,
Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers, Centre for Economic Performance, LSE dp0007, Centre for Economic Performance, LSE.
- Stiroh, Kevin J & Strahan, Philip E, 2003. " Competitive Dynamics of Deregulation: Evidence from U.S. Banking," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 35(5), pages 801-28, October.
- Molyneux, Philip & Thornton, John, 1992. "Determinants of European bank profitability: A note," Journal of Banking & Finance, Elsevier, Elsevier, vol. 16(6), pages 1173-1178, December.
- Hempell, Hannah S., 2002. "Testing for Competition Among German Banks," Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank, Research Centre 2002,04, Deutsche Bundesbank, Research Centre.
- Geroski, Paul A & Jacquemin, Alexis, 1988. "The Persistence of Profits: A European Comparison," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 98(391), pages 375-89, June.
- John H. Boyd & Gianni De Nicolã, 2005. "The Theory of Bank Risk Taking and Competition Revisited," Journal of Finance, American Finance Association, American Finance Association, vol. 60(3), pages 1329-1343, 06.
- Al-Muharrami, Saeed & Matthews, Kent & Khabari, Yusuf, 2006.
"Market Structure and Competitive Conditions in the Arab GCC Banking System,"
Cardiff Economics Working Papers, Cardiff University, Cardiff Business School, Economics Section
E2006/8, Cardiff University, Cardiff Business School, Economics Section.
- Al-Muharrami, Saeed & Matthews, Kent & Khabari, Yusuf, 2006. "Market structure and competitive conditions in the Arab GCC banking system," Journal of Banking & Finance, Elsevier, Elsevier, vol. 30(12), pages 3487-3501, December.
- Johan Mathisen & Thierry D. Buchs, 2005. "Competition and Efficiency in Banking," IMF Working Papers, International Monetary Fund 05/17, International Monetary Fund.
- Canhoto, Ana, 2004. "Portuguese banking: A structural model of competition in the deposits market," Review of Financial Economics, Elsevier, Elsevier, vol. 13(1-2), pages 41-63.
- Goddard, John & Molyneux, Philip & Wilson, John O.S. & Tavakoli, Manouche, 2007. "European banking: An overview," Journal of Banking & Finance, Elsevier, Elsevier, vol. 31(7), pages 1911-1935, July.
- Iwata, Gyoichi, 1974. "Measurement of Conjectural Variations in Oligopoly," Econometrica, Econometric Society, Econometric Society, vol. 42(5), pages 947-66, September.
- Berger, Allen N, 1995. "The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 27(2), pages 404-31, May.
- Carol Ann Northcott, 2004. "Competition in Banking: A Review of the Literature," Working Papers, Bank of Canada 04-24, Bank of Canada.
- Alexander Schiersch & Jens Schmidt-Ehmcke, 2010. "Empiricism Meets Theory: Is the Boone-Indicator Applicable?," Discussion Papers of DIW Berlin 1030, DIW Berlin, German Institute for Economic Research.
- Iannotta, Giuliano & Nocera, Giacomo & Sironi, Andrea, 2007. "Ownership structure, risk and performance in the European banking industry," Journal of Banking & Finance, Elsevier, Elsevier, vol. 31(7), pages 2127-2149, July.
- Maudos, Joaquin & Fernandez de Guevara, Juan, 2003.
"Factors Explaining the Interest Margin in the Banking Sectors of the European Union,"
15252, University Library of Munich, Germany.
- Maudos, Joaquin & Fernandez de Guevara, Juan, 2004. "Factors explaining the interest margin in the banking sectors of the European Union," Journal of Banking & Finance, Elsevier, Elsevier, vol. 28(9), pages 2259-2281, September.
- Goddard, J. A. & Wilson, J. O. S., 1999. "The persistence of profit: a new empirical interpretation," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 17(5), pages 663-687, July.
- Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, Elsevier, vol. 10(1-2), pages 87-92.
- Neven, Damien & Roller, Lars-Hendrik, 1999. "An aggregate structural model of competition in the European banking industry," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 17(7), pages 1059-1074, October.
- Giuliano Iannotta & Giacomo Nocera & Andrea Sironi, 2007. "Ownership structure, risk and performance in the European banking industry," Post-Print, HAL hal-00861806, HAL.
- Horst Gischer & Toni Richter, 2014. "Produktivitätsmessung von Banken: die Cost Income Ratio – ein belastbares Performancemaß?," FEMM Working Papers 140008, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Brämer, Patrick & Gischer, Horst & Richter, Toni & Weiß, Mirko, 2013. "Competition in banks’ lending business and its interference with ECB monetary policy," Journal of International Financial Markets, Institutions and Money, Elsevier, Elsevier, vol. 25(C), pages 144-162.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Huw Hughes).
If references are entirely missing, you can add them using this form.