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Risk, competition, and efficiency in banking: Evidence from China

Tan, Aaron Yong and Floros, Christos (2018) Risk, competition, and efficiency in banking: Evidence from China. Global Finance Journal, 35. pp. 223-236. ISSN 1044-0283

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Abstract

This paper tests the interrelationships among risk, competition, and efficiency in the Chinese banking industry between 2003 and 2013, with an efficiency-adjusted Lerner index and stability inefficiency as the indicators of competition and insolvency risk. The results show that Chinese commercial banks with higher efficiency have higher credit risk and insolvency risk, but lower liquidity risk and capital risk. Greater competition decreases credit risk and insolvency risk, but increases liquidity risk. Credit risk and insolvency risk are significantly and positively related to efficiency, while liquidity risk and capital risk are significantly and negatively related. Finally, lower liquidity risk decreases competition.

Item Type: Article
Uncontrolled Keywords: competition, Chinese banking, efficiency, risk
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Schools: Huddersfield Business School
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Depositing User: Sally Hughes
Date Deposited: 11 Dec 2017 10:59
Last Modified: 26 Mar 2018 15:16
URI: http://eprints.hud.ac.uk/id/eprint/34074

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