Banking competition and stability: evidence from West Africa
This study explored the relationship between banking competition and bank stability. We used data of 10 countries in West Africa over the period of 2000–2014. Employing Generalized Method of Moments style Panel Vector Autoregressive estimation model, we found out that banking competition is stabilit...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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AIMS Press
2020-10-01
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| Series: | National Accounting Review |
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| Online Access: | https://www.aimspress.com/article/10.3934/NAR.2020015/fulltext.html |
| _version_ | 1818139824740106240 |
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| author | Joana Cobbinah Tan Zhongming Albert Henry Ntarmah |
| author_facet | Joana Cobbinah Tan Zhongming Albert Henry Ntarmah |
| author_sort | Joana Cobbinah |
| collection | DOAJ |
| description | This study explored the relationship between banking competition and bank stability. We used data of 10 countries in West Africa over the period of 2000–2014. Employing Generalized Method of Moments style Panel Vector Autoregressive estimation model, we found out that banking competition is stability-enhancing. Again, findings from the granger causality test show that the relationship between banking competition and bank stability is bidirectional. We also found out that banking competition explains 50 percent of the variations in bank stability in the region. The results from the impulse response function indicated that the impact of one standard deviation shock in the rise of Boone indicator as a proxy for banking competition on stability (bank Z-score) was zero for the first year and dropped to negative through to the tenth year. Overall, our findings largely support the “competition-stability view”. |
| first_indexed | 2024-12-11T10:34:14Z |
| format | Article |
| id | doaj.art-e9b6d23f1d9c44a09f412c99f8b3ce8f |
| institution | Directory Open Access Journal |
| issn | 2689-3010 |
| language | English |
| last_indexed | 2024-12-11T10:34:14Z |
| publishDate | 2020-10-01 |
| publisher | AIMS Press |
| record_format | Article |
| series | National Accounting Review |
| spelling | doaj.art-e9b6d23f1d9c44a09f412c99f8b3ce8f2022-12-22T01:10:46ZengAIMS PressNational Accounting Review2689-30102020-10-012326328410.3934/NAR.2020015Banking competition and stability: evidence from West AfricaJoana Cobbinah0Tan Zhongming1Albert Henry Ntarmah2School of Finance and Economics, Jiangsu University, Zhenjiang, Jiangsu, 212013, P. R. ChinaSchool of Finance and Economics, Jiangsu University, Zhenjiang, Jiangsu, 212013, P. R. ChinaSchool of Finance and Economics, Jiangsu University, Zhenjiang, Jiangsu, 212013, P. R. ChinaThis study explored the relationship between banking competition and bank stability. We used data of 10 countries in West Africa over the period of 2000–2014. Employing Generalized Method of Moments style Panel Vector Autoregressive estimation model, we found out that banking competition is stability-enhancing. Again, findings from the granger causality test show that the relationship between banking competition and bank stability is bidirectional. We also found out that banking competition explains 50 percent of the variations in bank stability in the region. The results from the impulse response function indicated that the impact of one standard deviation shock in the rise of Boone indicator as a proxy for banking competition on stability (bank Z-score) was zero for the first year and dropped to negative through to the tenth year. Overall, our findings largely support the “competition-stability view”.https://www.aimspress.com/article/10.3934/NAR.2020015/fulltext.htmlbank competitionbank stabilityboone indicatorwest africapanel vector autoregression |
| spellingShingle | Joana Cobbinah Tan Zhongming Albert Henry Ntarmah Banking competition and stability: evidence from West Africa National Accounting Review bank competition bank stability boone indicator west africa panel vector autoregression |
| title | Banking competition and stability: evidence from West Africa |
| title_full | Banking competition and stability: evidence from West Africa |
| title_fullStr | Banking competition and stability: evidence from West Africa |
| title_full_unstemmed | Banking competition and stability: evidence from West Africa |
| title_short | Banking competition and stability: evidence from West Africa |
| title_sort | banking competition and stability evidence from west africa |
| topic | bank competition bank stability boone indicator west africa panel vector autoregression |
| url | https://www.aimspress.com/article/10.3934/NAR.2020015/fulltext.html |
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