The Structure - Conduct - Performance Paradigm in the European Union Banking

• Autorzy: Beata Gavurova , Kristina Kocisova , Anna Kotaskova
• Języki publikacji: EN

Abstrakty

EN

In this study we investigate the structure and performance at the European Union (EU) banking market as a whole between 2008 and 2015. The structure of this banking market was measured by two main concentration indices: the Herfindahl-Hirschman Index (HHI) and the Concentration Ratio for 5 largest banks (CR5). The results show a stable development in concentration until 2012, and a significant decrease in 2012. Since 2013, the level of concentration increased, reaching its historical maximum at the end of 2014, when the increase in market concentration was reflecting primarily the decline in the number of credit institutions. The performance was measured by means of profitability indicators: the Return on Assets (ROA) and the Return on Equity (ROE). Since 2008, the development of the market in question was affected by the financial crisis, which resulted in low profitability till the end of 2013. In more recent years the profitability in European banking market slightly increased. The purpose of this paper was to examine the relations between structure and performance. We tried to test the presence of structure-conduct- performance (SCP) paradigm in the EU conditions. The presence of this paradigm was verified using the Granger causality test for panel data. The results of our analysis show that under the studied conditions only the one-way relationship running from banking sector performance to banking market concentration was approved. The findings do not confirm the presence of the SCP paradigm, but are in line with the quiet life hypothesis, thus indicating there is a negative relationship between concentration and performance at European banking market. (original abstract)

Słowa kluczowe

EN

Banking; Concentration; Granger casuality

PL

Bankowość; Koncentracja; Przyczynowość w sensie Grangera

• Czasopismo: Economics & Sociology
• Rocznik: 2017
• Tom: 10
• Numer: nr 4
• Strony: 99--112

Twórcy

autor

Beata Gavurova

• Technical University of Kosice, Slovakia

autor

Kristina Kocisova

• Technical University of Kosice, Slovakia

autor

Anna Kotaskova

• Paneuropean University Bratislava, Slovakia

Bibliografia

• Aleknavičiene, A., Tvaronavičiene, M. (2006). Some aspects of the Lithuanian banking sector transformation. Journal of Business Economics and Management, 7(4), 235-241.
• Bain, J. S. (1959). Industrial Organization. Wiley.
• Becerra Alonso, D., Androniceanu, A., Georgescu, I. (2016). Sensitivity and Vulnerability of European Countries in Time of Crisis Based on a New Approach to Data Clustering and Curvilinear Analysis. Administration and Public Management, 27, 46-62.
• Belás, J., Polach, J. (2011, April). Economic Imbalance and Regulatory Traps in Banking Sector. In: Proceedings of the 5th International Scientific Conference Finance and the performance of firms in science, education and practice. April 28, 2011, Zlín, Czech Republic, 28-36.
• Belás, J. (2013). The Leadership Style and the Productiveness of Employees in the Banking Sector in Slovakia. Journal of Competitiveness, 5(1), 39-52. doi: 10.7441/joc.2013.01.03
• Belás, J., Sipko, J., Bilan, Y. (2015a). Regional Aspects of Business Environment Creation in the SME Segment in Slovakia. Mediterranean Journal of Social Sciences, 6(3), 637-645. doi:10.5901/mjss.2015.v6n3p637.
• Belás, J., Demjan, V., Habánik, J., Hudáková, M., Sipko, J. (2015b). The business environment of small and medium-sized enterprises in selected regions of the Czech Republic and Slovakia. E&M Economics and Management, 18(1), 95-110. doi:10.15240/tul/001/2015- 1-008.
• Belás, J., Chochol'áková, A., Gabčová, L., Sipko, J. (2015c). Bank Customers' Satisfaction, Customers ́s Loyalty and Additional Purchases of Banking Products and Services. A Case Study from the Czech Republic. Economics and Sociology, 8(3), 82-94.
• Casu, B., Girardone, C. (2006). Bank competition, concentration and efficiency in the single European market. The Manchester School, 74(4), 441-468.
• Cipovová, E., Belás, J. (2012). Assessment of Credit Risk Approaches in Relation with Competitiveness Increase of the Banking Sector. Journal of Competitiveness, 4(2), 69- 84. doi:10.7441/joc.2012.02.05.
• Claessens, S., Laeven, L. (2004). What Drives Bank Competition? Some International Evidence. Journal of Money, Credit and Banking, 3, 563-583. doi:10.1353/mcb.2004.0044.
• Demsetz, H. (1973). Industry structure, market rivalry, and public policy. Journal of Law and Economics, 16(1), 1-9.
• European Central Bank (2013). Banking structures report. Frankfurt am Main. Germany.
• Ferreira, C. (2014). Panel Granger causality between bank efficiency and market concentration in the European Union. Research in Applied Economics, 6(1), 107-127. doi:10.5296/rae.v6i1.4589.
• Galloppo, G., Paimanova, V., Aliano, M. (2015). Volatility and Liquidity in Eastern Europe Financial Markets under Efficiency and Transparency Conditions. Economics and Sociology, 8(2), 70-92. doi: 10.14254/2071-789X.2015/8-2/6.
• Gavurová, B. (2012). Source identification of potential malfunction of balanced scorecard system and its influence on system function. E+M: Ekonomie a Management, 15(3), 76-90.
• Grčić Fabić, M., Zekić, Z., Samaržija, L. (2016). Implementation of Management Innovation - a Precondition for the Development of Local Government Effectiveness: Evidence from Croatia. Administration and Public Management, 27, 7-29.
• Goldberg, L., Rai, A. (1996). The Structure-Performance Relationship in European Banking. Journal of Banking and Finance, 4, 745-771.
• Granger, C. W. J. (1981). Investigating Causal Relations by Econometric. Rational Expectations and Econometric Practice, 1, 371.
• Grigorian, D. A., Manole, V. (2006). Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis. Comparative Economic Studies, 3, 497-522. doi: 10.1057/palgrave.ces.8100129.
• Hicks, J. (1935). The Theory of Monopoly. Econometrica, 3, 1-20.
• Jantoń-Drozdowska, E., Mikołajewicz-Woźniak, A. (2017). The impact of the distributed ledger technology on the Single Euro Payments Area development. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(3), 519-535. doi: 10.24136/eq.v12i3.28.
• Kubiszewska, K. (2017). Banking concentration in the Baltic and Western Balkan states - selected issues. Oeconomia Copernicana, 8(1), 65-82. doi: 10.24136/oc.v8i1.5.
• Lesáková, Ľ., Dubcová, K. (2016, May). Knowledge and Use of the Balanced Scorecard Method in the Businesses in the Slovak Republic. In: 3rd International Conference on New Challenges in Management and Organization: Organization and Leadership, 2 May 2016, Dubai, UAE. Procedia - Social and Behavioral Sciences, 230, 39-48. doi: 10.1016/j.sbspro.2016.09.006.
• Majková, M. S., Solík, J., Sipko, J. (2014). The Analysis of Chosen Business Obstacles and Problems with the Financing of Young Entrepreneurs in Slovakia. Economics and Sociology, 7(3), 90-103. doi:10.14254/2071-789x.2014/7-3/7.
• Marfels, C. (1971). Absolute and Relative Measures of Concentration Reconsidered. Kyklos, 4, 753-766.
• Mason, E. S. (1939). Price and Production Policies of Large-Scale Enterprise. The American Economic Review, 1, 61-74.
• Minh, N. V., Huu, N. H. (2016). The Relationship between Service Quality, Customer Satisfaction and Customer Loyalty: An Investigation in Vietnamese Retail Banking Sector. Journal of Competitiveness, 8(2), 103-116. doi: 10.7441/joc.2016.02.08.
• Paulík, J., Kombo, F., Ključnikov, A. (2015). CSR as a driver of satisfaction and loyalty in commercial banks in the Czech Republic. Journal of International Studies, 8(3), 112-127.
• Piotrowska, A., Polasik, M., Piotrowski, D. (2017). Prospects for the application of biometrics in the Polish banking sector. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(3), 501-518. doi: 10.24136/eq.v12i3.27.
• Pruteanu-Podpiera, A., Weill, L., Schobert, F. (2008). Banking competition and efficiency: A micro-data analysis on the Czech banking industry. Comparative Economic Studies, 50(2), 253-273. doi:10.1057/palgrave.ces.8100248.
• Rajnoha, R., Novák, P., Merková, M. (2016). Relationships Between Investment Effectiveness Controlling and Business Performance. Montenegrin Journal of Economics, 12(2), 29-44. doi:10.14254/1800-5845.2016/12-1/1.
• Rumler, F., Waschiczek, W. (2012). Have Changes in the Financial Structure Affected Bank Profitability? Evidence for Austria. Oesterreichische Nationalbank. doi:10.1080/1351847X.2014.984815.
• Smirlock, M. (1985). Evidence on the (Non) Relationship between Concentration and Profitability in Banking. Journal of Money, Credit and Banking, 1, 69-83. doi:10.2307/1992507.
• Skvarciany, V., Iljins, J. (2015). The role of change management in trust formation in commercial banks. Business: Theory and Practice, 16(4), 373-378. doi:10.3846/btp.2015.557.
• Svitálková, Z. (2014). Comparison and Evaluation of Bank Efficiency in Austria and the Czech Republic. Journal of Competitiveness, 6(2), 15-29. doi: 10.7441/joc.2014.02.02.
• Tregenna, F. (2009). The Fat Years: The Structure and Profitability of the US Banking Sector in the Pre-crisis Period. Cambridge Journal of Economics, 4, 609-632. doi:10.1093/cje/bep025.

Identyfikatory

DOI

10.14254/2071-789X.2017/10-4/8