Comparative studies of risk, concentration and efficiency in transition economies
Open Access
- 1 January 2015
- journal article
- Published by Virtus Interpress in Risk Governance and Control: Financial Markets & Institutions
- Vol. 5 (4), 177-186
- https://doi.org/10.22495/rgcv5i4c1art7
Abstract
This paper compares the risk taking behaviour of banks in two groups of early and late transition countries during two periods: the pre-crisis (2000-2006) and the financially turbulent (2007-2012). Using data for 254 banks for the period 2000-2012 we find that during the stable period (2000-2006) the banks with higher concentration and higher technical efficiency take more risks in the late transition countries, while this is ambiguous for the turbulent period (2007-2012). This supports the ‘competition-stability’ hypothesis during the stable period (2000-2006) for the late transition countries. Although the concentration ratio did not change much in the early transition countries for the periods 2000-2006 and 2007-2012, the banks with higher concentration and higher technical efficiency tend to take less risks during the stable period (2000-2006), but more during the turbulent period (2007-2012).Keywords
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