Competition and Profitability in the Chinese Banking Industry: New Evidence from Different Ownership Types

Yong Tan ()
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Yong Tan: University of Huddersfield

Journal of Industry, Competition and Trade, 2020, vol. 20, issue 3, No 3, 503-526

Abstract: Abstract This paper tests the competition in different banking markets in China (deposit, loan, and non-interest income markets) using a sample of Chinese commercial banks (state-owned, joint-stock, and city commercial banks) over the period 2003–2013 and further examines the impact of competition on bank profitability for the whole sample and also for different ownership types. The results show that non-interest income market in the Chinese banking industry has a higher level of competition compared to the other two markets during the early years of the examined period. The findings further report that in a higher competitive deposit market, Chinese commercial banks have lower levels of profitability. Finally, the results suggest that a higher competitive loan market leads to higher profitability of all these three types of banks while the impact of deposit market competition is significant and negative.

Keywords: Bank profitability; Bank competition; GMM; China (search for similar items in EconPapers)
JEL-codes: C23 G21 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10842-019-00305-4

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