The effect of bank concentration and financial development on economic growth and income volatility: evidence from the OIC countries
Although the well-functioning financial structure is, in general, a key to long-term sustainable economic growth and overall stability, the debate on the relationship between financial development and economic growth remains non-fading. The theoretical literature provides startlingly different and sometimes conflicting views on the finance growth nexus. In addition to this non-fading debate on finance - growth nexus, the degree of banking competition attracted increasing attention in recent years. Banking consolidations, merger and acquisitions, fuelled by overall banking deregulations and the lowering of economic barriers led to structural changes within the banking and financial environment. This prompted concerns among some observers over the potential for monopoly power in local banking markets. In short, there are two major, but contradicting, views. On one side, there are those who support competitive banking structure as it promotes competitive market practices that lead to efficiency. On the other, there are also those who argue that banks with monopolistic power (bank concentration) may spur economic growth as they are more capable of information collection, screening and monitoring borrowers ...
Financial development , Economic growth , Income volatility , OIC countries
Smolo, E. (2019). The effect of bank concentration and financial development on economic growth and income volatility: evidence from the OIC countries (Doctoral dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3176