The Structure – Conduct – Performance Paradigm in the European Union Banking

Gavurová, Beata; Kočišová, Kristína; Kotásková, Anna

doi:10.14254/2071-789x.2017/10-4/8

Cited by 17 publications

(16 citation statements)

References 31 publications

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“…Findings from the study suggested that market structure and conduct significantly determined the performance of commercial banks in Ghana within the study period. This is congruent with a similar study conducted by Gavurova, Kocisova and Kotaskova (2017), which examined the structure and performance of European Union (EU) banking markets using the SCP paradigm. The main problem or gap observed from these studies is the dearth of studies in African real estate markets that look at the performance of REITs from the perspective of the conduct, structure and performance of REIT companies.…”

Section: Literature Reviewsupporting

confidence: 87%

Structure, Conduct and Performance of REITs in Emerging Markets

Dabara

Ogunba

2020

JARER

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Purpose: This study examines the correlations between the structure, conduct and performance of Real Estate Investment Trusts in Nigeria (N-REITs) with a view to providing information that will enhance and guide real estate investment decisions on N-REITs. Design/Approach: The study population consists of all three REIT companies in Nigeria, namely: Skye Shelter Fund, Union Home REIT and UACN Property Development Company (UPDC) REIT. Secondary data on dividends and share prices of N-REITs; Total Business Revenues (TBR) and Total Individual Expenditure (TIE) on conduct variables were sourced from periodicals of the respective companies covering the period from 2008 to 2016. The data series for the study were analyzed by means of the Kwiatkowski-Phillips-Schimidt-Shin (KPSS) unit root tests, Philip-Perron (PP) unit root tests, Granger Causality tests, and the Ordinary Least Square (OLS) regression. Findings: The study shows a Herfindahl Hischman Index (HHI) that ranged between 41.81% (recorded in 2010) and 100% recorded in 2008. This suggests a high concentration in the N-REITs industry. Similarly, the Granger Causality Test conducted reveals a bi-directional causal relationship between the structure, conduct and performance of N-REITs. Practical Implications: The study provides essential information (on the HHI, return performance and causal relationships) for stakeholders in the real estate sector regarding the influence of structure and conduct on the performance of N-REITs. This information will be valuable for equipping asset managers, insurance companies, pension funds and individual real estate investors in making informed investment decisions. Originality/Value: This study is unique as it is the first to draw a link between the structure, conduct and performance of REITs in an African emerging real estate market; something that has not been considered in previous studies.

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Section: Literature Reviewsupporting

confidence: 87%

Structure, Conduct and Performance of REITs in Emerging Markets

Dabara

Ogunba

2020

JARER

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“…Source: Taken from Madura (2017) Gavurova et al (2017) investigated the structure and performance in the European Union (EU) banking market during 2008-2015. The banking market structure was measured by two main concentration indicators, which are Herfindahl-Hirschman Index (HHI) and the Concentration Ratio for 5 largest banks (CR5).…”

Section: Figure-1 Conceptual Frameworkmentioning

confidence: 99%

Determinants of Profitability in Banking Industry: A Case Study of Indonesia

Jumono

Sugiyanto

Mala

2019

Asian Economic and Financial Review

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The purpose of this study is to investigate the determinants of profitability in Indonesian banking industry. This research defines profitability as basic earning power (BEP) and return on equity (ROE) with variables like basic condition, market structure, banking characteristics and performance as its determinants. Both credit market and deposit market channel of Indonesian banking were used to analyze the data. The Structure-Conduct Performance (SCP) paradigm was used to offer theoretical perspective. Data was collected through purposive sampling technique, randomly picked from Indonesian banks financial statements during 2001-2014. The dynamic panel GMM-Arellanno Bond was used as the tool analysis. The results show that basic condition, market structure, banking characteristic, and performance significantly influence profitability. Based on this result, the study recommends that Indonesian banking segment should improve its market structure through enhancement of performance particularly that of individual banks. It also recommends that regulations and policy planning of national banking industry should be directed to retaining and increasing profitability without relying on market power, nor requiring collusion or high interest to get higher profit. The implication of the current research will be seen in judging the durability of bank profitability and finding means to make it strong enough despite the influence of crisis, money market and inflation, although it may be still sensitive to exchange rate volatility. Contribution/ Originality:This study contributes to the existing literature since the determinants of banking profitability are seen holistically in this study. Based on Structure-Conduct-Performance (SCP) versus Efficiency Structure Hypothesis (ESH) Paradigm test, this study has attempted to detect the condition of the Indonesian Banking Industry, whether it is still collusive or has gained efficiency in the current time.

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“…Hicks (1935, p. 8) "quiet life" hypothesis (QLH), which posits that as banks amass market power when industry concentration increases, managers can raise price and would exhibit no motivations to curtail costs (Lelissa & Kuhil, 2017;Berger & Hannan, 1998). The finding that QLH holds in the industry is consistent with Gavurova, Kocisova, and Kotaskova (2017) view of EU banking, Repkova and Stavarek (2013) outlook of the Czech banking industry, and Berger and Hannan (1998) assessment of the US banking industry. However, it contradicts Mensi & Zouari (2010) and Casu and Giradone (2009) findings that show no support for QLH.…”

Section: Resultsmentioning

confidence: 81%

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Oredegbe¹

2020

IJEF

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This study investigates the Canadian banking industry profitability and seeks to determine if there is evidence of market power hypothesis (MPH) and/or efficiency structure hypothesis (ESH) in the industry. Using GMM and data from 2006 to 2018, it finds no support for the structure-conduct-performance (SCP) component of MPH. However, evidence of relative market power (RMP) in the industry reflects partial support for MPH, implying that banks that offer differentiated products are able to exercise market power, increase market share, and achieve better profitability. The lack of support for X-efficiency (ESX) and scale efficiency (ESS), which are components of ESH, indicates no support for the ESH. The finding that QLH holds in the industry suggests the level of competition is inadequate and that managers in the industry exhibit suboptimal behaviour. Therefore, increasing the level of competition in the industry will stimulate managerial effectiveness. Findings relating to the control variables show that spread impedes profitability, whereas capitalization and the joint influence of spread and liquidity risk have facilitating effects. Credit risk is immaterial to profitability however, the effect of economic growth can be positive. This study provides a better understanding of the industry, which is important to managers, regulators, and policy makers. The robustness checks affirm the consistency of the findings and policy implications.

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The Structure – Conduct – Performance Paradigm in the European Union Banking

Cited by 17 publications

References 31 publications

Structure, Conduct and Performance of REITs in Emerging Markets

Structure, Conduct and Performance of REITs in Emerging Markets

Determinants of Profitability in Banking Industry: A Case Study of Indonesia

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

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