A Replication of “Are Competitive Banking Systems More Stable?” (Journal of Money, Credit, and Banking, 2009)

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dc.contributor.authorDas KK
dc.contributor.authorBandarnayake S
dc.contributor.authorReed WR
dc.date.accessioned2018-05-07T05:20:51Z
dc.date.available2018-05-07T05:20:51Z
dc.date.issued2017en
dc.date.updated2017-10-26T03:33:53Z
dc.description.abstractThis study replicates Schaeck, Čihák, and Wolfe (2009), henceforth SCW, and performs a variety of robustness checks. Using a cross-country, time series sample of 45 countries from 1980-2005, SCW investigate the relationship between competition and concentration in the banking system, and the occurrence of country-level systemic crises. Their primary measure of competition in the banking industry is Panzar and Rosse’s H-statistic. Concentration is measured using a concentration ratio of the three largest banks. They conclude that (i) competition and concentration measure two separate dimensions of the banking sector, and (ii) greater competition is associated with fewer systemic crises. Using data and code provided by the authors, we are able to exactly reproduce the original results of SCW. However, we find that their results are not generally robust. While we confirm their results on concentration, when we extend the data to the current period and use updated variable values, we find that competition, as measured by the H-statistic, is consistently insignificant across both duration and logit models.en
dc.identifier.citationDas KK, Bandarnayake S, Reed WR (2017). A Replication of “Are Competitive Banking Systems More Stable?” (Journal of Money, Credit, and Banking, 2009).en
dc.identifier.urihttp://hdl.handle.net/10092/15313
dc.language.isoen
dc.subjectSystemic risken
dc.subjectBank competitionen
dc.subjectConcentrationen
dc.subjectH-statisticen
dc.subjectReplicationen
dc.subjectC41en
dc.subjectG21en
dc.subjectG28en
dc.subjectL11en
dc.subject.anzsrcFields of Research::38 - Economics::3801 - Applied economics::380107 - Financial economicsen
dc.subject.anzsrcFields of Research::35 - Commerce, management, tourism and services::3502 - Banking, finance and investment::350204 - Financial institutions (incl. banking)en
dc.titleA Replication of “Are Competitive Banking Systems More Stable?” (Journal of Money, Credit, and Banking, 2009)en
dc.typeDiscussion / Working Papersen
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