Contents of the volume

2018, Volume 71 - Issue 2

ISSN: 2499-8265
RSS feed citation: At RePEc
Publication date: 02 May 2018

SOME INTERNATIONAL FINANCIAL CONTRIBUTIONS: EMPIRICAL RESULTS AND POLICY IMPLICATIONS

Amedeo Amato

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ASSESSING PORTFOLIO MARKET RISK IN THE BRICS ECONOMIES: USE OF MULTIVARIATE GARCH MODELS

Lumengo Bonga-Bonga, Lebogang NLEYA

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BANK COMPETITION, CONCENTRATION AND RISK-TAKING IN THE UAE BANKING INDUSTRY

Aktham Maghyereh

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LINEAR AND NONLINEAR ATTRACTORS IN PURCHASING POWER PARITY

Imad Moosa, Ming MA

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DIRECT AND INDIRECT FORECASTING OF CROSS EXCHANGE RATES

Imad Moosa, John VAZ

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DOES THE EXPECTATIONS HYPOTHESIS OF THE TERM STRUCTURE HOLD IN KOREA AFTER THE ASIAN FINANCIAL CRISIS? SOME EMPIRICAL EVIDENCE (1999-2017)

Marco Tronzano

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Genoa Chamber of Commerce
Economia Internazionale / International Economics

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Corresponding author

Aktham MAGHYEREH, University of Johannesburg, Johannesburg,South Africa

Bank Competition, Concentration and Risk-taking in the UAE Banking Industry

Pages

129-148

Abstract

This paper investigates the impact of competition and concentration on bank stability or risk-taking behavior in the UAE banking industry over the period 2006 to 2015. The Herfindahl–Hirschmann (HHI) index is used as an inverse measure of competition, while the nonperforming loans (NPL) ratio and Z-scores are used as proxies for bank risk-taking. The impact of competition is derived from a dynamic panel specification that accounts for bank-level factors (size, efficiency, liquidity, and capitalization). Using the two-step system Generalized Method of Moments (GMM) estimates, our empirical results suggest that the increase in competition erodes banks’ charter value and increases their tendency to assume additional risks with associated negative repercussions on financial stability. These results strongly support the competition-fragility hypothesis for UAE banks.

JEL classification

G18, G21, G32, G38

Keywords

Bank Competition, Bank Stability, Herfindahl–Hirschmann Index, UAE Banks

Index

  1. Introduction
  2. Literature review
  3. Methodology and data
  4. Empirical results
  5. Conclusions

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