Bank Competition and Outreach: Evidence from Turkey

Aysan, Ahmet Faruk; Disli, Mustafa; Schoors, Koen

doi:10.2139/ssrn.2259026

Cited by 2 publications

(2 citation statements)

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“…On the one hand, the perfect information hypothesis argues that higher bank competition leads to higher economic growth because banks with higher market power tend to charge higher loan prices which may in turn preclude financial intermediation activities (Black and Strahan, 2002;Degryse and Ongena, 2005;Cetorelli and Gamberra, 2001). In a similar vein, Aysan et al (2013) show that higher bank competition increases the outreach of banks in Turkey. Yet, Aydemir (2013) also studies the Turkish banking sector and reports that higher bank concentration exacerbates the issues of collusion in the loan market.…”

Section: Related Literaturementioning

confidence: 79%

Competition, Financial Intermediation, and Riskiness of Banks: Evidence from the Asia-Pacific Region

Soedarmono¹,

Tarazi²

2015

Emerging Markets Finance and Trade

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From a sample of commercial banks in the Asia-Pacific region over the 1994-2009 period, this study highlights that banks in less competitive markets exhibit lower loan growth and higher instability. Such instability is further followed by a decline in deposit growth, suggesting that Asian banks are also subject to indirect market discipline mechanisms through bank competition. This study therefore sheds light on the importance of enhancing bank competition to overcome bank risk and strengthen financial intermediation. Likewise, this study advocates the importance of strengthening market discipline to reduce bank riskiness regardless of the degree of competition in the banking industry.

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