Non-performing loans in the euro area: Does bank market power matter?

Maria Karadima and Helen Louri

International Review of Financial Analysis, 2020, vol. 72, issue C

Abstract: In this study, we investigate the impact of bank market power on the change in NPL ratios in the euro area over the period 2005–2017 by employing a penalized quantile regression model for dynamic panel data. The results suggest that post-crisis consolidation facilitates the faster reduction of NPLs, especially in the euro area periphery countries, while competition discourages the growth of new NPLs. In addition, the presence of foreign banks is beneficial on its own and with respect to containing market power effects. Finally, while commercial banks create more NPLs, market power plays a moderating role.

Keywords: Non-performing loans; Competition; Concentration; Penalized instrumental variable quantile regression with fixed effects estimator (search for similar items in EconPapers)
JEL-codes: C23 C51 G21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521920302374
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:72:y:2020:i:c:s1057521920302374

DOI: 10.1016/j.irfa.2020.101593

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().