Does competition affect banks’ stability? Evidence from ASEAN economies

Omar Alaeddin, Moutaz Abojeib, Mudeer Ahmed Khattak


This manuscript attempts to investigate the relationship of stability and competition in dual banking economies of ASEAN-5 over the period 2006–2016. We use the Lerner index (LI) as a proxy for banking competition and Z-score is used as a proxy for banking stability as a method. Using the two-step system GMM technique, our results do not indicate any association between competition and stability. In conclusion, one of the benefits that a country can gain form a dual banking system is that it can improve its financial inclusion by attracting customers based on religious needs.

Palabras clave

Financial stability, Risk-Shifting, Bank competition.

Texto completo:


Universidad del Zulia /Venezuela/ opción/ /ISSN: 1012-1587/ ISSNe 2477-9385

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Este obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial-CompartirIgual 3.0 Unported.