Measuring Competition and Stability: Recent Evidence for European Banking

Philip Molyneux (), Hong Liu and John Wilson
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Hong Liu: Bangor University

No 10020, Working Papers from Bangor Business School, Prifysgol Bangor University (Cymru / Wales)

Abstract: This paper uses a variety of structural and non-structural measures (including the Lerner index, Rosse-Panzar H-statistic and Profits-Persistence parameters) to gauge competitive conditions in 11 European banking systems over 1997 to 2008. As in Carbo et al (2009) we find that competition measures tend to provide inconsistent results and the measures are statistically unrelated. We also find that our banking sector risk measures (Z-score, loan-loss provisions, variation in ROE and ROA) are unrelated to the various competition measures. This raises doubts about the generality of the findings of previous empirical studies that investigate competition-stability and competition fragility issues.

Keywords: Competition; European Banking; NEIO; Risk; SCP; Stability (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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