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Table 4 Robustness check using alternative measure of financial stability

From: Do competition and efficiency lead to bank stability? Evidence from Bangladesh

Variables

\(\sigma {\text{ROA}}\)

NPL

(1)

(2)

(3)

(4)

(5)

(6)

\({\text{Financial stability}}_{t - 1}\).

0.553*** (0.019)

0.585*** (0.024)

0.596*** (0.033)

0.499*** (0.021)

0.507*** (0.022)

0.483*** (0.032)

\({\text{Competition }}_{t - 1}\).

− 0.071*** (0.009)

− 0.066*** (0.009)

− 0.098*** (0.016)

− 10.082*** (0.635)

− 9.850*** (0.623)

− 8.410*** (0.637)

\({\text{Competition }}_{t - 1}^{2}\)

0.074*** (0.009)

0.069*** (0.009)

0.095*** (0.014)

1.360*** (0.087)

1.328*** (0.084)

1.222*** (0.095)

Efficiency

 

− 0.006** (0.002)

− 0.008* (0.004)

 

− 0.169*** (0.063)

− 3.213*** (1.033)

\({\text{Competition}}_{t - 1} {{ \times Efficiency}}\)

  

0.007** (0.003)

  

0.933*** (0.284)

Bank size

− 0.000 (0.000)

− 0.000 (0.000)

− 0.001* (0.001)

− 0.059*** (0.005)

− 0.038*** (.007)

− 0.034*** (0.010)

Liquidity

− 0.001*** (0.000)

− 0.000 (0.001)

− 0.000 (0.001)

− 0.000 (0.002)

− 0.005* (0.003)

− 0.009** (0.005)

Log(GDP per capita)

− 0.001** (0.000)

− 0.001 (0.001)

− 0.001 (0.001)

− 0.108*** (0.007)

− 0.126*** (.010)

− 0.134*** (0.011)

gGDP

0.002*** (0.000)

0.002*** (0.000)

0.002*** (0.000)

− 0.002 (0.002)

− 0.002 (0.002)

− 0.004* (0.002)

Governance

− 0.001*** (0.000)

− 0.003** (0.001)

− 0.003** (0.001)

− 0.187*** (0.013)

− 0.200*** (0.013)

− 0.210*** (0.013)

Regulation

− 0.000** (0.000)

− 0.001*** (0.000)

− 0.001*** (0.000)

− 0.005*** (0.002)

− 0.006*** (0.001)

− 0.002 (0.001)

Constant

0.002*** (0.000)

0.004 (0.004)

0.007 (0.005)

18.541*** (1.152)

18.241*** (1.124)

14.410*** (1.189)

Year dummies

Yes

Yes

Yes

Yes

Yes

Yes

No. of instruments

28

28

28

29

29

29

AR (2)

0.24

0.13

0.18

0.19

0.18

0.19

Hansen statistics

0.22

0.12

0.11

0.11

0.12

0.11

Observations

210

210

210

240

240

240

No. of banks

30

30

30

30

30

30

  1. Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1. Here, financial stability, competition, efficiency, bank size and liquidity are measured by standard deviation of ROA or NPL, Boone indicator using market share of loan, PCA of net interest margin ratio, operating efficiency ratio, working capital ratio and asset turnover ratio, log(Total asset) and loan-to-deposit ratio, respectively