Bank Competition, Agency Costs, and the Performance of the Monetary Policy

Alencar, Leonardo S.; Nakane, Márcio I.

doi:10.2139/ssrn.926337

Cited by 4 publications

(3 citation statements)

References 29 publications

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“…The positive relationship of FEXR which is one of the proxies of MR conforms to the a priori expectation and Ekinci (2016), while the negative relationship of LIR with ROA conforms to the a priori expectation, Kasman and Carvallo (2013) and Ekinci (2016). In the same vein, the finding on DPOR is in tandem with the a priori expectation and the empirical findings of Agyei and Marfo-Yiadom (2011); Uwuigbe, Jafaru, and Ajayi (2012); Ajanthan (2013) and Ehikioya (2015), while the mixed findings on agency costs are in tandem with Wang (2010) and Alencar and Nakane (2004). The results further reveal that ROA (-1) , DPOR (-1) , DPOR (-2) , LIR (-2) and FEXR (-1) have negative relationships with DPOR to the tune of 0.0240; 27.776; 6.959; 0.044 and 2.15 percent, while ROA (-2) ; LIR (-1) ; FEXR (-2) , AUR (-1) and AUR (-2) posit positive relationships with DPOR at 5.701; 0.040; 8.223; 0.000 and 0.013 percent, respectively.…”

Section: Vector Error Correction Estimationssupporting

confidence: 51%

Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

Olarewaju

2020

Folia Oeconomica Stetinensia

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Research Background: The concept of risk is of great importance in any financial system, due to unstable economic situations and fluctuating environmental factors. Like other variables, risk has a significant effect on firms’ returns and profit. Purpose: This study aims at examining the relationship between dividend policy and performance taking cognisance of the uncontrollable risk (market risk). Research methodology: This study was modelled using 250 commercial banks from 30 selected Sub-Saharan African countries in the period 2008 to 2017. The Panel-Vector Error Correction Model was used to estimate the model. Result: From the long run analysis, a long run relationship between dividend policy, agency cost, and bank performance is evident. The disequilibrium will take about 39.5% yearly speed of adjustment to return to a steady state. There is an inverse relationship between Lending interest rate (market risk proxy) with bank performance while there is a positive relationship of foreign exchange rate (market risk proxy) and bank performance in SSA. Novelty: Market risk’s influence on the relationship between dividend policy and bank performance was firstly established. Therefore, it is recommended that the banking sector in SSA should focus more on endogenous factors and review some of their policies as these contribute more significantly to variations in their performance than exogenous factors.

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Section: Vector Error Correction Estimationssupporting

confidence: 51%

Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

Olarewaju

2020

Folia Oeconomica Stetinensia

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“…To this effect, Maudos and Fernandez (2004) argue that acquisitions can increase banking concentration but that they reduce the quality of loans. In addition, Alencar and Nakane (2004) observe that competitiveness makes the economy more sensitive to interest rates.…”

Section: Introductionmentioning

confidence: 99%

The role of foreign banks in the transmission of monetary policy: Empirical evidence from Tunisia

Gassouma

Ben-Ahmed

2021

EKON ANAL

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This paper presents an empirical analysis of the effect of monetary policy shocks on credit supply in Tunisia, using a vector autoregressive model and a nonlinear interactive model. The focus is on the magnitude of these shocks in the presence of foreign banks. The variables of interest are the concentration index of deposit banks, and monetary policy shocks based on the monthly data of 27 universal and business banks covering the period 1993 to 2016. The results support a positive and significant impact of concentration index on credit supply. However, monetary policy shocks appear to have no significant effect when the market is concentrated with the entry of foreign banks. The findings of this study also reveal that the entry of foreign banks neutralises monetary policy shock transmission in the credit supply, which may be offset by market discipline.

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“…77For instance, there are mixed results regarding the effect of concentration on various monetary policy transmission channels (see Adams & Amel, 2005; Alencar & Nakane, 2004; Vives, 1999). …”

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confidence: 99%

The effect of banking market structure on the lending channel: Evidence from emerging markets

Amidu

Wolfe

2013

Rev Financ Econ

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JEL classification: E4 E5 F3 L1 This paper analyses the extent to which the level of bank competition influences monetary policy transmission. Using a large panel dataset of 978 banks from 55 countries, and employing the Lerner index model as a measure of market structure, our results show that an increase in banking sector competition weakens the effectiveness of monetary policy on bank lending. The findings are robust to a broad array of sensitivity checks including control of alternative measurements of the Lerner index, different samples and different methodological specifications. By extension, these results have important policy implications for regulators in assessing the effectiveness of monetary policy transmission mechanisms.

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Bank Competition, Agency Costs, and the Performance of the Monetary Policy

Cited by 4 publications

References 29 publications

Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

Nexus of Market Risk, Dividend Policy and Commercial Banks’ Performance in Sub-Saharan Africa

The role of foreign banks in the transmission of monetary policy: Empirical evidence from Tunisia

The effect of banking market structure on the lending channel: Evidence from emerging markets

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