Competition, Efficiency and Stability: An Empirical Study of East Asian Commercial Banks

Hien Thu Phan; Sajid Anwar; William R J Alexander; Hanh Thi My Phan

doi:10.1016/j.najef.2019.100990

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Competition, Efficiency and Stability: An Empirical Study of East Asian Commercial Banks

Journal article

Open access

Peer reviewed

Competition, Efficiency and Stability: An Empirical Study of East Asian Commercial Banks

Hien Thu Phan, Sajid Anwar, William R J Alexander and Hanh Thi My Phan

North American Journal of Economics and Finance, Vol.50, 100990

2019

DOI: https://doi.org/10.1016/j.najef.2019.100990

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Abstract

bank competition

bank efficiency

bank stability

bank fragility

East Asian banking systems

sub-sampling bootstrapped DEA approaches

Z-score

This paper examines the relationships between competition, efficiency and stability in the banking systems of four East Asian countries (China, Hong Kong, Malaysia and Vietnam) over 2004-2014. The results support the traditional competition-fragility view and suggest that an increase in competition may result in a decrease in stability. Similarly, credit risk, bank size and market concentration may positively affect bank stability. By contrast, banks with higher liquidity risk and revenue diversification may become less stable. Empirical analysis suggests that banking sector stability was adversely affected by the global financial crisis. Listed banks may be less stable than their non-listed peers. The macroeconomic environment (measured in terms of inflation and GDP growth) also affects bank stability. Additionally, some important policy implications with respect to improving bank stability are recommended.

Details

Title: Competition, Efficiency and Stability: An Empirical Study of East Asian Commercial Banks
Authors: Hien Thu Phan (Author) - University of Economics Ho Chi Minh City, Vietnam
Sajid Anwar (Author) - University of the Sunshine Coast - School of Business
William R J Alexander (Author) - University of the Sunshine Coast - School of Business
Hanh Thi My Phan (Author) - University of Finance-Marketing, Vietnam
Publication details: North American Journal of Economics and Finance, Vol.50, 100990
Publisher: Elsevier BV
Date published: 2019
DOI: 10.1016/j.najef.2019.100990
ISSN: 1062-9408
Organisation Unit: School of Business and Creative Industries; Indigenous and Transcultural Research Centre; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99450993902621
Output Type: Journal article

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Web Of Science research areas: Business, Finance; Economics

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