Is competition good or bad for the price, quantity, and quality of bank lending?

ABSTRACT: This paper extends the existing literature by examining an important channel through which bank competition could drive the real economy by comprehensively influencing bank lending in three components-price, volume, and quality. For the measurement of bank competition, we build a series of different structural (concentration indicators) and non-structural (Lerner, Boone, and Panzar-Rose H-statistic indexes) measures, given that the reliance on solely one individual measure could lead to a misleading conclusion. Through a sample of commercial banks during 2007-2021 in a single Vietnamese banking market, we find a decline in bank loan growth and a rise in credit risk under the pressure of high competition. With respect to the association between bank competition and the price of credit, our

SUBMITTER: Huynh J 

PROVIDER: S-EPMC10414992 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature