The impacts of risk and competition on bank profitability in China

By Yong Tan. 2016

452 citations recorded by the source corpus.

Several rounds of banking reforms in China have aimed to increase the competitive condition and further enhance stability in the Chinese banking sector, while the joint effects of competition and risk-taking behaviour on the profitability in the banking sector have not been studied well enough so far in the literature. The current study contributes to the empirical literature by testing the impacts of risk and competition on profitability in the Chinese banking industry (state-owned, joint-stock and city commercial banks) over the period 2003–2011 under a one-step Generalized Method of Moments (GMM) system estimator. The results do not show any robust finding with regards to the impacts of competition and risk on bank profitability, while it is found that Chinese bank profitability is affected by taxation, overhead cost, labour productivity and inflation. The study provides policy implications to the Chinese banking industry and different ownership types of Chinese commercial banks.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/7a3c1f3969b75b5c385179891cdb43eb27ddd143

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Citations in the corpus

Bank-specific and macro-economic determinants of profitability of Indian commercial banks: A panel data approach (2018, methodology): “…Zouari-Ghorbel (2014) and Bougatef (2017) who studied Tunisia, Marijana, Poposki, and Pepur (2012) who studied Macedonia, Tan and Floros (2015) and Tan (2016) who studied China, Bouzgarrou, Jouida, and Louhichi (2017) who studied France, Bose, Saha, Zaman, and Islam (2017) and Robin, Salim, and…”
Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan (2019, methodology): “…have concluded that BSV, ISV, and CSV have a significant impact on bank profitability, but these studies ignored the role of intangible resources (Dietrich and Wanzenried 2011; Dinç 2005; García-Herrero et al. 2009; Haris et al. 2019; Micco et al. 2007; Smirlock 1985; Tan 2016; Yao et al. 2018).”
The Interactional Relationships Between Credit Risk, Liquidity Risk and Bank Profitability in MENA Region (2020, unknown): “…on the American context (De Nicolo, 2000; Imbierowicz & Rauch, 2014), the European context (Chortareas, Girardone, & Ventouri, 2011; Kim, 2015; Thorsten, Heiko, Thomas, & Natalja, 2009) and Asian countries (Arif & Anees, 2012; Sohaimi, 2013; Tan, 2016; Zolkifli, Abdul Hamid, & Hawati Janor, 2015).”
Bank performance in China: A Perspective from Bank efficiency, risk-taking and market competition (2019, methodology): “In addition, there is a large number of literature investigating the impact of competition on profitability in the banking industry (Maudos and Fernandez de Guevara, 2004; Tan and Floros, 2014; Tan, 2016; among others).”
The effect of capital ratios on the risk, efficiency and profitability of banks: Evidence from OECD countries (2017, unknown): “Recently, Tan (2016) finds that more capitalized banks are more profitable because they”
Ownership, bank size, capitalization and bank performance: Evidence from India (2020, background): “A large number of studies find a positive association between GDP growth rate and bank profitability (Goddard, et al., 2004a; Kosmidou et al., 2005; Shen et al., 2009; Ali et al., 2011; Dietrich & Wanzenried, 2011; Gul et al., 2011; Van Ommeren, 2011; Chronopoulos et al., 2012; Karimzadeh et al., 20”