The Persistence of Bank Profit

33 Pages Posted: 22 Oct 2010 Last revised: 9 Jan 2011

See all articles by John Goddard

John Goddard

University of Wales System - Bangor University

Hong Liu

University of Aberdeen

Philip Molyneux

University of Sharjah - College of Business Administration

John O. S. Wilson

University of St. Andrews

Multiple version iconThere are 2 versions of this paper

Date Written: January 6, 2011

Abstract

This paper examines the strength of competition in 65 national banking industries. Country-level dynamic panel estimates of the persistence of bank profit are reported and compared. The persistence of bank profit appears to be weaker for banks in developing countries than for those in developed countries. Persistence is relatively high in North America and Western Europe and relatively low in East Asia, the Pacific and Sub-Saharan Africa. The persistence of profit is stronger when entry barriers are high, and when competition is low according to both structure- and conduct-based competition indicators.

Keywords: Banking, competition, dynamic panel estimation, entry, profitability, persistence

JEL Classification: G21, L11

Suggested Citation

Goddard, John and Liu, Hong and Molyneux, Philip and Wilson, John O. S., The Persistence of Bank Profit (January 6, 2011). Available at SSRN: https://ssrn.com/abstract=1695396 or http://dx.doi.org/10.2139/ssrn.1695396

John Goddard (Contact Author)

University of Wales System - Bangor University ( email )

Bangor, Gwynedd, Wales LL57 2DG
United Kingdom

Hong Liu

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Philip Molyneux

University of Sharjah - College of Business Administration ( email )

University City Road
Sharjah, 27272
United Arab Emirates

John O. S. Wilson

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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