The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya
In our paper, we examined the relationship between non-performing loans, as a measure of stability, and concentration, as a measure of competition, in the Libyan banking sector. We used aggregate quarterly data for the 15 commercial banks in the country during the period 2002-2013. A broad set of t...
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| Format: | Article |
| Language: | English |
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EconJournals
2015-07-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/1315 |
| _version_ | 1828017599630278656 |
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| author | Haytem Ahmed Troug Rashid Sbia |
| author_facet | Haytem Ahmed Troug Rashid Sbia |
| author_sort | Haytem Ahmed Troug |
| collection | DOAJ |
| description |
In our paper, we examined the relationship between non-performing loans, as a measure of stability, and concentration, as a measure of competition, in the Libyan banking sector. We used aggregate quarterly data for the 15 commercial banks in the country during the period 2002-2013. A broad set of tests were conducted to measure the relationship between the two variables, and alternative robustness tests were conducted to verify our core finding that less competition in the banking sector leads to a more resilient banking sector. Thus, our results offer empirical support against the “competition–stability” theory and conform the “competition–fragility” literature. We conclude by recommending the need to inspect in more detail (on a bank by bank level) the relationship between competition and fragility in developing countries in general and in Libya in particular.
Keywords: Banking Competition; Financial Stability; Oil exporting countries; MENA; Libya.
JEL Classifications: C50; C58; G21; G28.
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| first_indexed | 2024-04-10T10:51:23Z |
| format | Article |
| id | doaj.art-cac58340e544411ba6624f7f1a12cceb |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T10:51:23Z |
| publishDate | 2015-07-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-cac58340e544411ba6624f7f1a12cceb2023-02-15T16:20:07ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382015-07-0153The Relationship between Banking Competition and Stability in Developing Countries: The Case of LibyaHaytem Ahmed TrougRashid Sbia0Solvay Brussels School of Economics and Management In our paper, we examined the relationship between non-performing loans, as a measure of stability, and concentration, as a measure of competition, in the Libyan banking sector. We used aggregate quarterly data for the 15 commercial banks in the country during the period 2002-2013. A broad set of tests were conducted to measure the relationship between the two variables, and alternative robustness tests were conducted to verify our core finding that less competition in the banking sector leads to a more resilient banking sector. Thus, our results offer empirical support against the “competition–stability” theory and conform the “competition–fragility” literature. We conclude by recommending the need to inspect in more detail (on a bank by bank level) the relationship between competition and fragility in developing countries in general and in Libya in particular. Keywords: Banking Competition; Financial Stability; Oil exporting countries; MENA; Libya. JEL Classifications: C50; C58; G21; G28. https://econjournals.com/index.php/ijefi/article/view/1315 |
| spellingShingle | Haytem Ahmed Troug Rashid Sbia The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya International Journal of Economics and Financial Issues |
| title | The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya |
| title_full | The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya |
| title_fullStr | The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya |
| title_full_unstemmed | The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya |
| title_short | The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya |
| title_sort | relationship between banking competition and stability in developing countries the case of libya |
| url | https://econjournals.com/index.php/ijefi/article/view/1315 |
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