Bank market power and revenue diversification: Evidence from selected ASEAN countries

My Nguyen, Michael Skully, Shrimal Perera

Research output: Contribution to journalArticlepeer-review

30 Citations (Scopus)

Abstract

This paper examines the association between bank market power and revenue diversification using a sample of 153 commercial banks from five Association of Southeast Asian Nations (ASEAN) member countries (Indonesia, Malaysia, the Philippines, Thailand and Vietnam). We find a non-linear relationship between bank market power and revenue diversification, where at lower degrees of market power (in loan and deposit markets) banks concentrate on revenue diversification. In contrast, those with greater market power focus more on traditional interest-based products. Our findings also indicate that credit losses experienced earlier, during and after the Asian financial crisis have encouraged ASEAN banks to diversify into non-traditional activities to compensate for their excessive losses. When the markets recovered and loan demand increased, however, traditional interest-based business has become more important. These results remain consistent across all models providing robust results.
Original languageEnglish
Pages (from-to)688-700
Number of pages13
JournalJournal of Asian Economics
Volume23
Issue number6
DOIs
Publication statusPublished - 1 Dec 2012
Externally publishedYes

Keywords

  • ASEAN
  • Lerner Index
  • Market power
  • Revenue diversification

Fingerprint

Dive into the research topics of 'Bank market power and revenue diversification: Evidence from selected ASEAN countries'. Together they form a unique fingerprint.

Cite this