Procyclicality of Bank Growth and Competitive Environment: Cross-country Evidence

• Autorzy: Małgorzata Olszak , Iwona Kowalska
• Języki publikacji: EN

Abstrakty

EN

This paper attempts to find out what is the role of competitive environment in shaping the sensitivity of growth in banking to the business cycle. To answer this question, we apply a large set of individual bank level data including over 8000 banks operating in more than 100 countries. This study uses the growth of assets, loans, deposits and leverage as proxies of bank growth and Lerner index as a proxy for the competitive environment. The analysis shows that decreased competition is associated with increased procyclicality of bank growth. However, in a perfectly competitive environment the growth turns out to be countercyclical. This effect differs between high- and low-income countries. A perfectly competitive environment is associated with countercyclical growth in high-income countries. The opposite result is found for low-income countries. Our results for Central Eastern European countries show that increased competition is associated with enhanced procyclicality of growth. (original abstract)

Słowa kluczowe

EN

Assets; Credit; Bank deposit; Financial leverage; Procyclicality; Competition

PL

Aktywa; Kredyt; Depozyt bankowy; Dźwignia finansowa; Procykliczność; Konkurencja

• Czasopismo: Central European Journal of Economic Modelling and Econometrics (CEJEME)
• Rocznik: 2023
• Tom: 15
• Numer: nr 4
• Strony: 311--344

Twórcy

autor

Małgorzata Olszak

• University of Warsaw

autor

Iwona Kowalska

• University of Warsaw

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Identyfikatory

DOI

10.24425/cejeme.2023.149071