Bank Stability and Competition: Evidence from Albanian Banking Market

Eurasian Journal of Business and Economics

卷:10

Gerti SHIJAKU¹ 

[1] Bank of Albania;

关键词: Bank stability;    Competition;    Boone indicator;    Panel Data;    GMM.;   

DOI  :  10.17015/ejbe.2017.019.07

来源: DOAJ

【 摘 要 】

This paper analyses the inter-temporal competition – stability nexus after the globalfinancial crises. For this reason, the empirical estimation approach follows a five –step procedure. First, we utilise quarterly macroeconomic and balance sheet andincome statement data for 16 banks operating in the Albanian banking sector overthe period 2008 – 2015. Second, we calculate a new composite index as a measureof bank stability conditions, which includes a wide set of information rather thanfocusing only on one aspect of risk. Then, we construct a proxy for bank competitionsuch as the Boone indicator. Empirical estimations are based on the GeneralMethod of Moments approach. A set of robustness checks include also the use ofother alternative proxy of competition such as the Lerner index and the efficientadjustedLerner index, profit elasticity and the Herfindahl index. Empirical resultsstrongly support the “competition – stability” view after the global financial crises -that higher degree of competition boosts further bank stability conditions. Resultsfurther indicate that greater concentration has also a negative impact on bankstability. Results imply also that bank stability is positively linked withmacroeconomic conditions and capital ratio and inverse with operational efficiency.Finally, we do not find a non-linear relationship between competition and stability.

【 授权许可】

Unknown