Market Power and Efficiency in Banking: The Case of USA and Canada

U-Din, Salah; Tripe, David; Kabir, M. Humayun

doi:10.2139/ssrn.3118703

Cited by 4 publications

(4 citation statements)

References 38 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The Canadian banking sector is dominated by the big five banks and is among one of the most concentrated banking sectors of the world. One of the reasons for growth in bank size is the higher profitability of the bigger banks which led to an increase in market concentration (U-Din et al , 2018; Xiang et al , 2015). The results reported in Table 4 are consistent with these prior studies that bank size in Canada is associated with higher bank performance.…”

Section: Estimations and Findingsmentioning

confidence: 99%

Money at risk: climate change and performance of Canadian banking sector

U-Din

Nazir

Shahzad

2021

JEAS

Self Cite

View full text Add to dashboard Cite

PurposeIn the last few decades, the frequency and intensity of extreme weather events have increased in most parts of the world including Canada because of global warming. The global warming in Canada is about double the magnitude of global warming; therefore, policymakers are concerned about the potential significant impact of the weather catastrophes on the economy and financial sector. The purpose of this study is to explore the impact of weather catastrophes on the Canadian banking sector.Design/methodology/approachUsing a sample of banking firms from Canada over the period 1988–2019, the present study estimates different econometric techniques to investigate the impact of weather catastrophes on the risk and performance of Canadian banks.FindingsAnalyses of the study do not find a significant impact of the weather catastrophes on the performance of the Canadian banks; however, it has helped banks to lower their risk level and improve stability due to proactive risk management. The findings of this study are not consistent with concerns of the policymakers about climate risk to the Canadian bank sector. More sector-specific research and policy initiatives are recommended to minimize the future financial risk of the increased frequency and intensity of natural disasters.Originality/valueThe study contributes to support the notion that the climate risk of banks is protected with insurance and reconstruction activities provide more banking opportunities.

show abstract

Section: Estimations and Findingsmentioning

confidence: 99%

Money at risk: climate change and performance of Canadian banking sector

U-Din

Nazir

Shahzad

2021

JEAS

Self Cite

View full text Add to dashboard Cite

show abstract

“…Основные крупнейшие банки США, как и в Европе, провели листинг на бирже еще до 2000 г., однако банковская система США характеризуется значительным количеством относительно крупных региональных банков, которые активно размещали свои акции на бирже. Наиболее ликвидный финансовый рынок и относительно низкие транзакционные издержки по выходу на биржу также способствовали привлечению финансирования с помощью инструмента IPO [13].…”

Section: денежно-кредитная политика / Monetary and Credit Policyunclassified

“…The author concludes that the placement of shares of credit institutions during the hot market period is the most promising in terms of the volume and dynamics of raising funds; the IPO market of credit institutions retains high growth potential, primarily in Asia and the CIS. Проблемам изучения рынка IPO посвящены работы ряда экономистов, таких как Н. Лианг [5], М. Дикл [6], В. Мехмуд [7], К. Сонг и других [8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26], однако вопросу IPO в банковской сфере уделяется мало внимания в научном сообществе, несмотря на всю важность данного сектора для экономики.…”

Section: Introductionunclassified

Analysis of the dynamics of IPO transactions in the banking sector

Belyaev

2021

jour

View full text Add to dashboard Cite

IPO (initial public offering) is a widespread financing instrument in the world, however, the scientific community pays little attention to the dynamics of IPOs in the banking sector. The aim of the study is to critically analyze the dynamics of IPO transactions of credit institutions on the horizon from January 1, 2000, to December 31, 2020. The research methodology includes analytical methods for collecting and processing information, comparative and graphical analysis of the database collected by the author and consisting of 305 IPOs of banks from 2000 to 2020. The study compares the dynamics of IPO transactions of credit institutions from developed and developing countries, identifies characteristics inherent in each market, and explains the differences in market dynamics. The study reveals clustering in the IPO market of credit institutions and compares clustering with the general market of initial public offerings. It is shown that lending institutions around the world have actively attracted funds through IPO, having placed their shares for a total of $ 218 billion. The bulk of the funds were attracted by banks from emerging markets, primarily from China. During this period, there were 3 IPO waves on the banking IPO market, characterized by a significant increase in placement volumes and profitability on the first day of trading. This clustering in the IPO market of credit institutions was not typical only for the banking sector but coincided with the global growth in the number of transactions and IPO yields. The author concludes that the placement of shares of credit institutions during the hot market period is the most promising in terms of the volume and dynamics of raising funds; the IPO market of credit institutions retains high growth potential, primarily in Asia and the CIS.

show abstract

“…However, there are ample findings that have been rather revealed mixed results. While employing the Granger causality, a positive result was found pertaining to the causal linkages of market power and cost efficiency in the case of Canada and the USA (Din et al, 2018). Instead, the most recent (Mala, Rodoni et al 2018) has reported consistent results as Market power has a positive relationship with the cost efficiency of banks in Indonesia by employing a panel regression model.…”

mentioning

confidence: 95%

The Causal Linkages between Market Power and Cost Efficiency: Testing Quiet Life Hypothesis for the Banking Industry

Hameed,

Jagirani,

Qureshi

et al. 2024

BBE

View full text Add to dashboard Cite

This study aims to test the quiet life hypothesis considering the impact of market power on cost efficiency in Pakistani banks where managers of the banking industry slacken their efforts to enjoy a ‘quiet life’ due to market power and are not focused on the cost efficiency of their banks. Thus, banks with high market power are relatively less focused on the efficient allocation of resources, resulting in a loss of consumer surplus and efficiency. We take panel data for a sample of 25 commercial banks throughout 2006-2019. Our findings suggest Uni-directional causality running from cost efficiency towards market power in the case of Pakistan. In addition, to control for endogeneity, we adopt a dynamic two-step system GMM approach to model the relationship between market power and cost efficiency. Our findings suggest significantly negative effects of cost efficiency over market power, disproving the presence of quiet life in the case of Pakistan. This study provides substantial theoretical contributions in the form of the Quiet life hypothesis and welfare performance of banks. However, to the best of our knowledge, the causal linkages and the effects of market power on cost efficiency or vice versa are not documented for the banking industry of Pakistan.

show abstract

Market Power and Efficiency in Banking: The Case of USA and Canada

Cited by 4 publications

References 38 publications

Money at risk: climate change and performance of Canadian banking sector

Money at risk: climate change and performance of Canadian banking sector

Analysis of the dynamics of IPO transactions in the banking sector

The Causal Linkages between Market Power and Cost Efficiency: Testing Quiet Life Hypothesis for the Banking Industry

Contact Info

Product

Resources

About