Competition in the banking industry, is it beneficial? Evidence from MENA region

Zoghlami, Faten; Bouchemia, Yassine

doi:10.1057/s41261-020-00135-z

Cited by 6 publications

(4 citation statements)

References 53 publications

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“…Interestingly, our results indicate an almost 10 times higher impact of banking market concentration on ROE compared to ROA, which is a finding that needs to be further investigated. The negative relationship between market concentration and banks' profitability in CEE countries confirms previous results in the literature that studied emerging and less developed economies, such as Tunisia (Naceur 2003), Czechia (Černohorský 2015), South-Eastern Europe (Athanasoglou et al 2006), Central and Eastern Europe (Căpraru and Ihnatov 2014) or the MENA region (Zoghlami and Bouchemia 2020), but one needs to consider that the banking market concentration in the CEE region is low to middle, apart from Estonia and Lithuania. This opens the road for consolidation in the banking market in the future, which might change the relationship between concentration and profitability.…”

Section: The Interplay Between Bank Profitability Financial System Attributes and The Macroeconomic Environment In Ceesupporting

confidence: 84%

Determinants of Bank Profitability in CEE Countries: Evidence from GMM Panel Data Estimates

Horobeț

Rădulescu

Belaşcu

et al. 2021

JRFM

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Given the high resilience of the Central and Eastern Europe (CEE) banking sectors during the last financial crisis and their major role in the CEE region in financing the economy and supporting the high growth rates achieved there, our paper investigates the determinants of banking profitability in the CEE banking sectors based on a Generalized Method of Methods (GMM) approach using data between 2009 and 2018. We have selected determinants from the macroeconomic factors and from the financial-banking specific factors using a two-step GMM method. Our findings demonstrate that unemployment rate, inflation, budget balance, non-governmental credit, non-performing loan rates, concentration rate and capitalization rate negatively impact on the banking profitability in the CEE banking sectors. According to these findings, some policy recommendations were elaborated.

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Section: The Interplay Between Bank Profitability Financial System Attributes and The Macroeconomic Environment In Ceesupporting

confidence: 84%

Determinants of Bank Profitability in CEE Countries: Evidence from GMM Panel Data Estimates

Horobeț

Rădulescu

Belaşcu

et al. 2021

JRFM

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“…These results suggest that both competition–stability and competition–fragility approaches are valid at the same time in the North African context; bank competition is associated with greater bank stability (competition–stability view, Allen and Gale, 2004; Soedarmono et al. , 2013; Goetz, 2018; Moyo and Sibindi, 2022), but only up to a certain level (0,49), beyond which it increases bank fragility (competition–fragility view, Berger and Hannan, 1998; Boyd and Nicolo, 2005; Albaity et al ., 2019; Zoghlami and Bouchemia, 2021). Our main results are robust and supported by González et al .…”

Section: Resultsmentioning

confidence: 99%

Competition–banking stability: the moderating role of government intervention quality in North African countries

Basty

Ghazouani²

2023

JRF

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PurposeThis study investigates how bank competition affects financial stability and whether government intervention contributes to shaping this relationship in North African countries.Design/methodology/approachA review of the literature on the subject was conducted, combined with an empirical analysis that used a two-step system generalized method of moments (GMM) and a sample of 45 banks operating in North African countries over the period 2005–2019.FindingsThe findings reveal a quadratic relationship between competition and banking stability in North African countries. Competition–stability view and competition–fragility view could be applied at the same time for North African banks. Additionally, in this context, results highlight a negative impact of government intervention on financial stability in a competitive financial sector. North African banks operating in a high government intervention quality environment tend to engage in high-risk investments. Robustness checks with alternative measures of competition and banking stability also show consistent results.Originality/valueTo the authors’ knowledge, this is the first time that the North African context has been explored to determine the role of the quality of government intervention in the relationship between competition and banking system fragility. This paper seeks to cover the shadow field in existing literature through further new information. Thus, it contributes to the emerging market banking literature by showing that both high and low levels of competition can improve financial stability in North African countries. Moreover, it expands its contribution by displaying the moderator effect of intervention quality on the bank competition–stability relationship.

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“…Competition positively correlates with return on assets and equity and negatively with net interest margin earned on issued loans (Zoghlami & Bouchemia 2021). Yet, competition is positively associated with loan growth (Yang & Shao 2016) and social engagement (Forgione & Migliardo 2020).…”

Section: Bank Activitiesmentioning

confidence: 99%

Competitiveness in Banking Sector: A Systematic Literature Review

Begimkulov

2023

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THE AIMS OF THE PAPER The concept of bank competitiveness has attracted increasing scientific attention. The current paper explores the directions and trends of research on bank competitiveness measures by reviewing recently published journal articles. METHODOLOGY The research follows the systematic literature review method. First, a set of keywords were defined. Then, the keywords were combined with the Boolean operator “AND” to identify articles in the two biggest scientific databases: Web of Science and Scopus. The identified papers were filtered and screened following the PRISMA method of selection. At the final stage, 33 articles were included. MOST IMPORTANT RESULTS Based on the analysis of published papers, the author identified the main research streams within bank competitiveness:risk-stability, market power, macroeconomic context, information technology, and new applications. Also, within the context of growing digitalization, little attention is paid to the influence of information technology on bank competitiveness. RECOMMENDATIONS Within the context of the growing importance of technological innovations in the financial sector (e.g., financial technology startups), there is still a lack of research on the influence of technological innovations implemented by banks on their competitiveness. Also, considering that the existing methods of measuring competitiveness in banks often provide conflicting information, developing new ways of estimating competitiveness considering the level of digitalization is necessary.

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Competition in the banking industry, is it beneficial? Evidence from MENA region

Cited by 6 publications

References 53 publications

Determinants of Bank Profitability in CEE Countries: Evidence from GMM Panel Data Estimates

Determinants of Bank Profitability in CEE Countries: Evidence from GMM Panel Data Estimates

Competition–banking stability: the moderating role of government intervention quality in North African countries

Competitiveness in Banking Sector: A Systematic Literature Review

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