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The effect of banking market structure on the lending channel: Evidence from emerging markets

  • Amidu, Mohammed
  • Wolfe, Simon
Registered author(s):

    This paper analyses the extent to which the level of bank competition influences monetary policy transmission. Using a large panel dataset of 978 banks from 55 countries, and employing the Lerner index model as a measure of market structure, our results show that an increase in banking sector competition weakens the effectiveness of monetary policy on bank lending. The findings are robust to a broad array of sensitivity checks including control of alternative measurements of the Lerner index, different samples and different methodological specifications. By extension, these results have important policy implications for regulators in assessing the effectiveness of monetary policy transmission mechanisms.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1058330013000372
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    Article provided by Elsevier in its journal Review of Financial Economics.

    Volume (Year): 22 (2013)
    Issue (Month): 4 ()
    Pages: 146-157

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    Handle: RePEc:eee:revfin:v:22:y:2013:i:4:p:146-157
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620170

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