How Bank Competition Influences Financial Stability
|Author:||Mgr. Romana Vildová|
|Year:||2017 - winter|
|Leaders:|| prof. Roman Horváth Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||This paper investigates the link between financial stability and bank competition by means of
the Arellano & Bond (1991) GMM model using annual panel data over the period 2000 – 2014
for 205 countries. Our data source is a new, richer and updated dataset The Global Financial
Development Database available at World Bank. Due to the specifics of this dataset we are able
to use new combinations of measures of financial stability and of bank competition and to study
their relationship in greater depth. We find a positive link between financial stability and bank
competition. Furthermore, our results provide evidence that it matters what measures of
financial stability and bank competition we apply. Lastly, we ascertain that the relationship
between financial stability and bank competition does not change over time.