Abstract
The purpose of this paper is to investigate the impact of competition on credit risk, liquidity risk, capital risk and insolvency risk in the Chinese banking industry during the period 2003-2013.
Design/methodology/approach:
This study uses a generalized method of moments system estimator to examine the impact of competition on risk. In particular, translog specifications are used to measure the competition and insolvency risk.
Findings:
The results show that greater competition within each bank ownership type (state-owned commercial banks, joint-stock commercial banks and city commercial banks) leads to higher credit risk, higher liquidity risk, higher capital risk, but lower insolvency risk.
Originality/value:
This paper is the first piece of research testing the impact of competition on different types of risk in banking industry and it further contributes to the empirical literature by using a more accurate competition indicator (efficiency-adjusted Lerner index) and a more precise insolvency risk indicator (stability inefficiency).
| Original language | English |
|---|---|
| Pages (from-to) | 332-354 |
| Number of pages | 23 |
| Journal | International Journal of Managerial Finance |
| Volume | 13 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 20 Mar 2017 |
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Does competition only impact on insolvency risk? New evidence from the Chinese banking industry. / Tan, Yong; Anchor, John.
In: International Journal of Managerial Finance, Vol. 13, No. 3, 20.03.2017, p. 332-354.Research output: Contribution to journal › Article
TY - JOUR
T1 - Does competition only impact on insolvency risk?
T2 - New evidence from the Chinese banking industry
AU - Tan, Yong
AU - Anchor, John
N1 - Embargo removed from ePrints 12/10/17 as per Emerald's new policies [JC]
PY - 2017/3/20
Y1 - 2017/3/20
N2 - Purpose:The purpose of this paper is to investigate the impact of competition on credit risk, liquidity risk, capital risk and insolvency risk in the Chinese banking industry during the period 2003-2013.Design/methodology/approach:This study uses a generalized method of moments system estimator to examine the impact of competition on risk. In particular, translog specifications are used to measure the competition and insolvency risk.Findings:The results show that greater competition within each bank ownership type (state-owned commercial banks, joint-stock commercial banks and city commercial banks) leads to higher credit risk, higher liquidity risk, higher capital risk, but lower insolvency risk.Originality/value:This paper is the first piece of research testing the impact of competition on different types of risk in banking industry and it further contributes to the empirical literature by using a more accurate competition indicator (efficiency-adjusted Lerner index) and a more precise insolvency risk indicator (stability inefficiency).
AB - Purpose:The purpose of this paper is to investigate the impact of competition on credit risk, liquidity risk, capital risk and insolvency risk in the Chinese banking industry during the period 2003-2013.Design/methodology/approach:This study uses a generalized method of moments system estimator to examine the impact of competition on risk. In particular, translog specifications are used to measure the competition and insolvency risk.Findings:The results show that greater competition within each bank ownership type (state-owned commercial banks, joint-stock commercial banks and city commercial banks) leads to higher credit risk, higher liquidity risk, higher capital risk, but lower insolvency risk.Originality/value:This paper is the first piece of research testing the impact of competition on different types of risk in banking industry and it further contributes to the empirical literature by using a more accurate competition indicator (efficiency-adjusted Lerner index) and a more precise insolvency risk indicator (stability inefficiency).
KW - Competition
KW - Risk
KW - Chinese banking
UR - https://www.scopus.com/record/display.uri?eid=2-s2.0-85019576161&origin=resultslist&sort=plf-f&src=s&st1=Does+competition+only+impact+on+insolvency+risk&st2=&sid=877dd788031dde541bc800b26aacbc98&sot=b&sdt=b&sl=62&s=TITLE-ABS-KEY%28Does+competition+only+impact+on+insolvency+risk%29&relpos=3&citeCnt=4&searchTerm=
U2 - 10.1108/IJMF-06-2016-0115
DO - 10.1108/IJMF-06-2016-0115
M3 - Article
VL - 13
SP - 332
EP - 354
JO - International Journal of Managerial Finance
JF - International Journal of Managerial Finance
SN - 1743-9132
IS - 3
ER -