Evidence on the (Non) Relationship between Concentration and Profitability in Banking

Smirlock, Michael

doi:10.2307/1992507

Cited by 592 publications

(491 citation statements)

References 7 publications

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“…Their view is that large size increases the organizational process which decreases efficiency. A number of studies like Emery, (1971) and Smirlock, (1985) detect insignificant relation between asset size and profitability.…”

Section: Bank Specific Determinants and Banking Performancementioning

confidence: 98%

“…The more funds deposited in savings and investment accounts, the greater the cost to the bank. In case of current accounts, as the number of accounts and deposits increases, the banks earn more profits (Smirlock, 1985). Increase in deposits improves the bank's performance but, it depends upon how the management of the bank is translating its liabilities of deposits to earning assets.…”

Section: Bank Specific Variablesmentioning

confidence: 99%

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Impact of Macroeconomic Factors on Banking Profitabilty

Lutf

Omarkhil²

2018

IFB

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This study comparatively focuses on the impact of macroeconomic determinants and the internal indicators on performance of conventional and Islamic banks in Pakistan. It evaluates the differential effects of macroeconomic variables and bank specific variables with a baseline study of five banks from each system. To determine the short-run and long-run impact of these factors, co-integration & general to specific approach are adopted. This study also considers bank specific and macroeconomic variables in two separate models (Return on Assets and Return on Equity). Our objective is to find the extent to which each system of banking is performing in the country. The results indicate that in the long run, Gross Domestic Product, and inflation, is positively related to performance, while Interest rate has no effect on the performance of banking sector in Pakistan. Similarly, bank size, capital adequacy, expenses, interest income and non-interest income are the bank related factors that significantly influence the performance of financial sector.

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Section: Bank Specific Determinants and Banking Performancementioning

confidence: 98%

Section: Bank Specific Variablesmentioning

confidence: 99%

Impact of Macroeconomic Factors on Banking Profitabilty

Lutf

Omarkhil²

2018

IFB

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“…Heggested (1977), note that liability items and assets items have an adverse and positive impact on profitability respectively. Emery (1971) also found positive impact on profitability whiles Heggested (1977) Smirlock (1985) and Kwast and Rose (1982), found that size has no effect on profitability. Hester and Zoellner (1966) also found no relationship between size and profitability.…”

Section: Related Studiesmentioning

confidence: 98%

Profitability Determinants of the Ghanaian Banking Sector in Ongoing Wave of Consolidation

Boadi¹

2015

IJBM

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The purpose of this research is to examine the influence of both internal and external factors that determine the profitability of Ghanaian banks. The period under consideration extends from 1997-2014. To determine factors that determine the commercial bank profitability in Ghana, the research employed random effects and pooled ordinary least square models. Internal variables, both financial and non-financial were obtained from the database of Ghana Association of Bankers over the period 1997-2014. The macroeconomic variables were retrieved from Ghana Statistical Service (GSS) and Bank of Ghana (BOG) databases. The results of our study reveal that internal and external variables significantly influence bank profitability, non-interest income is not the sole determinant of profitability as other internal variables, such as capital to assets, GDP growth are statistically significant. However, determinants such as liquidity, deposit ratio, overhead, non-performing loans, number of employees, inflation and real interest rate do not impact significantly on banks' profitability in Ghana. The research could not include more qualitative factors. Future research could include more qualitative factors, for example, management leadership style with the quantitative factors and test the long run effects using a cointegration approach. The main value of this paper is the analysis of new empirical evidence using a current data.

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“…One of the alternative approaches explaining the link between market structure and performance argued that industry structure may exist as a result of superior efficiency in production by particular players, which allows those firms to gain more market share (Peltzman, 1977;Smirlock, 1985;Evanoff and Fortier, 1988).…”

Section: Market Concentration and Price-cost Marginsmentioning

confidence: 99%

Market Structure and Price-Cost Margins in European Retail Gasoline Industry

Nowakowski

Karasiewicz

2016

JMBACE

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Purpose: The purpose of this study was to investigate the influence of market structure and market conduct characteristics (such as market concentration, presence of networks operated by global corporations, presence of vertically integrated companies, presence of hypermarket gasoline stations and consumption level) on price-cost margin levels, based on an example of the European Union retail gasoline market. Methodology:The research applied regression analysis on a panel data set comprising of average monthly price-cost margins for 2012 to 2015, based on the data published in the European Commission Oil Bulletin, and on a set of variables characterizing market structure and market conduct of 24 European Union member state countries. Findings:The results showed that in the case of retail gasoline markets, higher industrial concentration yields higher price-cost margins with a statistically significant influence of other market structure and conduct factors.

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Evidence on the (Non) Relationship between Concentration and Profitability in Banking

Cited by 592 publications

References 7 publications

Impact of Macroeconomic Factors on Banking Profitabilty

Impact of Macroeconomic Factors on Banking Profitabilty

Profitability Determinants of the Ghanaian Banking Sector in Ongoing Wave of Consolidation

Market Structure and Price-Cost Margins in European Retail Gasoline Industry

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