Diversification, Industry Concentration, and Bank Margins: Empirical Evidence from an Emerging South Asian Economy

• 발행기관: 한국유통과학회
• 저자명: Bilal SARWAR Noor MUHAMMAD Nadeem Uz ZAMAN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.7, 349~360쪽, 전체 12쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.07.30

영문 초록

The study aims to empirically examine the determinants of bank margins from Pakistan, an emerging South Asian economy. To elucidate the importance of the Pakistani banking sector, secondary data has been used, which was extracted from the annual accounts of twentyfour Pakistani scheduled commercial banks (20 conventional, four full-fledged Islamic) over a sample period of 2006 to 2017. The factors identified in the dealership model and the subsequent empirical developments in the dealership model categorized as bank-specific, diversification, regulatory, and industry concentration are analyzed by applying the most-common linear dynamic panel-data estimator, the Generalized Method of Moments (GMM) estimator, developed by Arellano and Bond (1991). The findings reveal that, among the bank-specific variables, funding cost, credit risk, managerial efficiency, market share, and operating cost are significant predictors of bank margins. For diversification variables employed in the study, both variables including net non-interest income and asset diversity are as well significant predictors of bank margins. It is also found that the market concentration variable proxied by the Herfindahl-Hirschman Index (HHI) is significantly predicting bank margins. Subsequently, one of the regulatory variables, the opportunity cost of holding reserves, and one bank-specific variable, the degree of risk aversion, are insignificant in the model.

목차

1. Introduction

2. Literature Review

3. Data and Methods

4. Results and Discussion

5. Conclusions and Recommendations

References

키워드

Dealership Model Diversification Generalized Method of Moments Scheduled Commercial Banks Pakistan