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RESEARCH PRODUCT
The Impact of Bank Concentration on Financial Distress: The Case of the European Banking System
Franco FiordelisiFranco FiordelisiAndrea CipolliniAndrea Cipollinisubject
Order (exchange)Financial economicsProbit modelEconometricsFinancial distressSample (statistics)BusinessShareholder valueEmpirical distribution functiondescription
This paper examines the impact of bank concentrationon bank financial distress using a balanced panel of commercial banks in the EU‐25 over a sample period running from 2003 to 2007. Financial distress is proxied by the observations falling below a given threshold of the empirical distribution of a risk‐adjusted indicator of bank performance: the Shareholder Value Ratio. We employ a panel probit regression estimated by GMM in order to obtain consistent and efficient estimates, following the suggestion made by Bertschek and Lechner (1998). After controlling for a number of environment variables, we conclude that our findings suggest a positive effect of bank concentration on financial distress.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2009-01-01 | SSRN Electronic Journal |