Abstract
This paper investigates the inter-temporal relationship between banking profitability, competition and risk of a sample of Chinese commercial banks by employing several profitability and risk indicators and using Seemingly Unrelated Regression (SUR) under a panel data framework over 2003-2009. The results support the Structure-Conduct-Performance (SCP) theory which states that there is a negative impact of competition on bank profitability. We also find that banks with higher profitability normally operate in a less competitive environment. The results have potentially important implications for the government and banking regulatory authorities to make relevant policies.
| Original language | English |
|---|---|
| Pages (from-to) | 303-319 |
| Number of pages | 17 |
| Journal | The Journal of Developing Areas |
| Volume | 48 |
| Issue number | 3 |
| Early online date | 4 May 2014 |
| DOIs | |
| Publication status | Published - 1 Jul 2014 |