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Empirical evidence on bank market power, business models, stability and performance in the emerging economies
Sudrajad O.Y.a,b, Hubner G.a
a HEC Liège, ULiège, Liège, Belgium
b School of Business and Management Institut Teknologi Bandung (SBM ITB), ITB, Bandung, Indonesia
[vc_row][vc_column][vc_row_inner][vc_column_inner][vc_separator css=”.vc_custom_1624529070653{padding-top: 30px !important;padding-bottom: 30px !important;}”][/vc_column_inner][/vc_row_inner][vc_row_inner layout=”boxed”][vc_column_inner width=”3/4″ css=”.vc_custom_1624695412187{border-right-width: 1px !important;border-right-color: #dddddd !important;border-right-style: solid !important;border-radius: 1px !important;}”][vc_empty_space][megatron_heading title=”Abstract” size=”size-sm” text_align=”text-left”][vc_column_text]© 2018, Eurasia Business and Economics Society.This paper studies the nexus between market power and business models in the banking industry. Business models are represented by non-interest income and non-deposit short-term funding share. We also examine the impact of bank business models on banking stability and performance. Using a sample comprising six ASEAN country banking sectors from 2002 to 2015, we find that banks with a strong capital base but lower net interest margin perform better in translating their market power into generating non-traditional income as alternative sources of revenues. Our findings also show that the implementation of the Basel 2 Accord encourages banks to create non-interest income from trading and derivatives activities as well as from other non-interest income. We also document that banks with higher market power tend to increase non-deposit short-term funding in their financing mix. In the evaluation of banking stability, our results suggest that banks with greater non-traditional income are associated with less overall banking risk. Moreover, non-traditional incomes also contribute to better bank performance.[/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Author keywords” size=”size-sm” text_align=”text-left”][vc_column_text][/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Indexed keywords” size=”size-sm” text_align=”text-left”][vc_column_text]Bank business models,Bank stability,Lerner index,Market power[/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Funding details” size=”size-sm” text_align=”text-left”][vc_column_text][{‘$’: ‘Acknowledgements This research has benefited from the financial support of the LPDP (Indonesia Endowment Fund for Education) and of Deloitte (Belgium and Luxembourg). The Authors would like to thank Cédric Heuchenne, Caroline Pommeranz, Bertram Steininger, and Didier Van Caillie, as well as the participants of the 2017 Luxembourg Doctoral Finance Workshop. We would like to thank the organizers of the EBES 25th Conference (Berlin 2018) for awarding us the best paper award. We also would like to thank Ahmed Faruk Aysan and all the participants of the EBES 25th Conference in Berlin. Finally, we thank to two EABR reviewers for their valuable feedback.’}, {‘$’: ‘This research has benefited from the financial support of the LPDP (Indonesia Endowment Fund for Education) and of Deloitte (Belgium and Luxembourg). The Authors would like to thank C?dric Heuchenne, Caroline Pommeranz, Bertram Steininger, and Didier Van Caillie, as well as the participants of the 2017 Luxembourg Doctoral Finance Workshop. We would like to thank the organizers of the EBES 25th Conference (Berlin 2018) for awarding us the best paper award. We also would like to thank Ahmed Faruk Aysan and all the participants of the EBES 25th Conference in Berlin. Finally, we thank to two EABR reviewers for their valuable feedback.’}][/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”DOI” size=”size-sm” text_align=”text-left”][vc_column_text]https://doi.org/10.1007/s40821-018-0112-1[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/4″][vc_column_text]Widget Plumx[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][/vc_column][/vc_row]