E3S Web Conf.
Volume 159, 2020The 1st International Conference on Business Technology for a Sustainable Environmental System (BTSES-2020)
|Number of page(s)||11|
|Section||Chapter 4: Industry, Innovation, and Infrastructure|
|Published online||24 March 2020|
Competition and stability in the banking sector of Kazakhstan
Almaty Technology University, 100 Tole bi str., 050000, Kazakhstan
2 Eurasian Law Academy after named Kunaeva, 107 Kurmangazy str., 050000, Kazakhstan
3 Riga Technical University, 6 Kalnciema str., LV-1048, Latvia
* Corresponding author: firstname.lastname@example.org
This paper examines the relationship between competition and stability in the Kazakh banking sector using quarterly bank level data of private commercial banks. There have been many theories stand out on the relationship between competition and stability of the banking sector so far. But theories of the competition-fragility view and competition-stability view are widely accepted theories in the literature. The main method applied to achieve the established goal is a multiple regression analysis. Bank stability is used as a dependent variable and proxied by risk index. To measure the level of competition Lerner index and Boone indicator are calculated. Besides, the consistency between concentration and competition measures is tested applying a correlation analysis. Concentration in the banking sector is measured using Herfindahl-Hirschman Index (HHI) and concentration ratio CR5. The research revealed no statistically significant relationship between the values of Lerner index and Boone indicator estimated for Kazakh banking sector. The hypothesis about the consistency between different competition measures is rejected. In turn, the hypothesis about positive effect of competition on bank soundness is rejected only in the case when competition is proxies by Lerner index. Using Boone indicator as a competition measure, the results are doubtful.
© The Authors, published by EDP Sciences, 2020
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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