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Impact of the Heterogeneity in Market Power on the Relationship Between Risk Taking and Competition: Case of the Chilean Banking Sector


  • Gabriel Pino
  • Iván Araya


Until the end of the 1990s, the existence of a negative relationship between banking competition and stability was generally accepted in the economic literature. Since then, a new point of view has emerged questioning this relationship and instead argues about the existence of a positive relationship between these two variables. This paper studies the impact of the heterogeneity in market power on this relationship through the case of the Chilean banking sector. The results indicate that this kind of heterogeneity can play an important role in the relationship between risk taking and competition.

Suggested Citation

  • Gabriel Pino & Iván Araya, 2013. "Impact of the Heterogeneity in Market Power on the Relationship Between Risk Taking and Competition: Case of the Chilean Banking Sector," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(4), pages 98-112, July.
  • Handle: RePEc:mes:emfitr:v:49:y:2013:i:4:p:98-112

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    Cited by:

    1. repec:eee:ecofin:v:47:y:2019:i:c:p:351-364 is not listed on IDEAS
    2. Samangi Bandaranayake & Kuntal K. Das & W. Robert Reed, 2018. "A Replication of “Bank Competition and Financial Stability: Much Ado About Nothing?” (Journal of Economic Surveys, 2016)," Working Papers in Economics 18/18, University of Canterbury, Department of Economics and Finance.
    3. Kasman, Saadet & Kasman, Adnan, 2015. "Bank competition, concentration and financial stability in the Turkish banking industry," Economic Systems, Elsevier, vol. 39(3), pages 502-517.
    4. repec:eee:ecosys:v:43:y:2019:i:1:p:111-129 is not listed on IDEAS

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    bank; competition; heterogeneity; stability;


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