Market Power and the Risk-Taking of Banks: Some Semiparametric Evidence From Emerging Economies

37 Pages Posted: 25 Jan 2018

See all articles by Bang Nam Jeon

Bang Nam Jeon

Drexel University - Department of Economics & International Business; Drexel University-School of Economics

Ji Wu

affiliation not provided to SSRN

Mengmeng Guo

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management

Minghua Chen

Southwestern University of Finance and Economics - Research Institute of Economics and Management

Date Written: January 25, 2018

Abstract

We investigate the nexus between the market power of banks and their risk-taking, using bank-level data from 35 emerging economies during the period of 2000-2014. Under a Bayesian framework, we employ the semiparametric method, which allows for a nonlinear risk impact of banks’ market power. Our results suggest a significant nonlinear relationship between the market power and the risk-taking of banks.

Keywords: Market Power, Bank Risk-Taking, Emerging Economies

JEL Classification: G21, G15, D53

Suggested Citation

Jeon, Bang Nam and Wu, Ji and Guo, Mengmeng and Chen, Minghua, Market Power and the Risk-Taking of Banks: Some Semiparametric Evidence From Emerging Economies (January 25, 2018). Asian Finance Association (AsianFA) 2018 Conference, Available at SSRN: https://ssrn.com/abstract=3109298 or http://dx.doi.org/10.2139/ssrn.3109298

Bang Nam Jeon (Contact Author)

Drexel University - Department of Economics & International Business ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

Drexel University-School of Economics ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

Ji Wu

affiliation not provided to SSRN

Mengmeng Guo

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun Street
Chengdu, Sichuan 610074
China

Minghua Chen

Southwestern University of Finance and Economics - Research Institute of Economics and Management ( email )

Gezhi Building 1201
555 Liutai Revenue, Wenjiang District
Chengdu, Sichuan 610074
China

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