IDEAS home Printed from https://ideas.repec.org/a/icf/icfjfe/v04y2006i2p56-65.html
   My bibliography  Save this article

Bank Concentration And Financial Development: The Cross-Country Evidence

Author

Listed:
  • Siong Hook Law
  • Ahmad Zainuddin Abdullah

Abstract

Concentration on banking industry may have long-lasting implication on financial market development. Some argue that concentration in the credit market introduces inefficiencies that would harm a firm's access to credit, thus hindering growth. On the other hand, some recent studies point out that some degree of monopoly power in banking is natural and beneficial. This study examines the effect of bank concentration on financial development, using a cross-country analysis on 68 economies during the period 1990-2001. The empirical results indicate that bank concentration is not a statistically significant determinant of financial development. Among the determinants of financial development, real income and institutional quality are the most prominent ones. The results suggest that concentration in the banking industry is positively associated with financial development in the lower middle-income and low-income countries. However, no such association is reported for upper-middle income countries. Therefore, the effect of bank concentration on financial development is subject to the level of economic development.

Suggested Citation

  • Siong Hook Law & Ahmad Zainuddin Abdullah, 2006. "Bank Concentration And Financial Development: The Cross-Country Evidence," The IUP Journal of Financial Economics, IUP Publications, vol. 0(2), pages 56-65, June.
    • Handle: RePEc:icf:icfjfe:v:04:y:2006:i:2:p:56-65
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Dong, Yan & Wang, Cong, 2021. "The effect of stimulus policy on lending behavior and bank risk: Evidence from the Chinese banking sector," Emerging Markets Review, Elsevier, vol. 49(C).
    2. Folorunsho M. Ajide, 2019. "Remittances, Bank Concentration and Credit Availability in Nigeria," Journal of Development Policy and Practice, , vol. 4(1), pages 66-88, January.

    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:icf:icfjfe:v:04:y:2006:i:2:p:56-65. 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: G R K Murty (email available below). General contact details of provider: .

    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.