Bank market structure and its effect on economic growth and banking systems stability Castillo, Christopher Kenneth F., Conchu, Raymond Alfonso D., Mendez, Hiraya R.

Banks have played an important role in stabilizing the financial system of the local and global community. This paper uses data from the ASEAN-4 region in order to review if market structure in the banking system will positively or negatively affect its stability and economic growth. This paper expl...

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Main Authors: Castillo, Christopher Kenneth F., Conchu, Raymond Alfonso D., Mendez, Hiraya R.
Format: text
Language:English
Published: Animo Repository 2017
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Online Access:https://animorepository.dlsu.edu.ph/etd_bachelors/6301
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Institution: De La Salle University
Language: English
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Summary:Banks have played an important role in stabilizing the financial system of the local and global community. This paper uses data from the ASEAN-4 region in order to review if market structure in the banking system will positively or negatively affect its stability and economic growth. This paper explains the background of the ASEAN-4 in terms of economic growth and financial stability. Next, the paper discusses the structural and non-structural models used to measure competition and concentration as forms of market structure. The paper then discusses the two dynamic panel models used to measure the relationship between market structure and banking system stability, and market structure and economic growth. It then reviews which regression model is the most stable and fitted based on the combination of banking system stability variable, competition variable, and concentration variable. The results show that when using generalized method of moments, the most fitted and stable variable to use is Boone indicator. Moreover, using the same variable, the result shows that competition increases the probability of banking system stability.