The Banks’ Profitability – Concentration Relationship in an Era of Financial Integration
This paper investigates the impact of concentration ratio of the Greek commercial banking market on banks’ return on equity; that is, it examines the structure – conduct – performance (SCP) hypothesis. This examination is performed by estimating a relationship that combines time series and cross-sectional data over the period 1993-1997. To accomplish this task we use panel data procedure and consider the total model, the fixed effect model and the random effect model. The leverage multiplier, the asset utilization, an expense ratio and a productivity ratio are employed as a vector of control variables that may differ across banks, or time periods. The empirical results indicate that the financial variables are important determinants of banks’ profitability. However, their impact appears to differ across banks. This finding reveals the different importance that the banks place to financial factors. Moreover, market structure is found to have no influence on banks’ performance, which suggests that the existing competition among Greek banks is not bounded by the market structure.
When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:iii:y:2000:i:3-4:p:57-68. 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: (Giorgos Zachopoulos)
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.