The effect of banking market structure on the lending channel: evidence from emerging markets
The effect of banking market structure on the lending channel: evidence from emerging markets
This paper analyses the extent to which the level of bank competition influences monetary policy transmission. Using a large panel dataset of 978 banks from 55 countries, and employing the Lerner index model as a measure of market structure, our results show that an increase in banking sector competition weakens the effectiveness of monetary policy on bank lending. The findings are robust to a broad array of sensitivity checks including control of alternative measurements of the Lerner index, different samples and different methodological specifications. By extension, these results have important policy implications for regulators in assessing the effectiveness of monetary policy transmission mechanisms.
banking competition, bank lending channel, emerging markets
146-157
Wolfe, S.
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Amidu, M.
81925c89-004b-4720-86d4-2cc536cf12b8
November 2013
Wolfe, S.
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Amidu, M.
81925c89-004b-4720-86d4-2cc536cf12b8
Wolfe, S. and Amidu, M.
(2013)
The effect of banking market structure on the lending channel: evidence from emerging markets.
Review of Financial Economics, 22 (4), .
(doi:10.1016/j.rfe.2013.05.002).
Abstract
This paper analyses the extent to which the level of bank competition influences monetary policy transmission. Using a large panel dataset of 978 banks from 55 countries, and employing the Lerner index model as a measure of market structure, our results show that an increase in banking sector competition weakens the effectiveness of monetary policy on bank lending. The findings are robust to a broad array of sensitivity checks including control of alternative measurements of the Lerner index, different samples and different methodological specifications. By extension, these results have important policy implications for regulators in assessing the effectiveness of monetary policy transmission mechanisms.
This record has no associated files available for download.
More information
e-pub ahead of print date: 13 May 2013
Published date: November 2013
Keywords:
banking competition, bank lending channel, emerging markets
Organisations:
Faculty of Business, Law and Art
Identifiers
Local EPrints ID: 356008
URI: http://eprints.soton.ac.uk/id/eprint/356008
ISSN: 1058-3300
PURE UUID: 851f1a9f-08ed-4b48-a001-3f8f3e934b04
Catalogue record
Date deposited: 10 Sep 2013 08:57
Last modified: 15 Mar 2024 02:45
Export record
Altmetrics
Contributors
Author:
M. Amidu
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
