Competition in the Indian Banking Sector: A Panel Data Approach
Abstract
:1. Introduction
- (a)
- We compare the competitive conditions among the public, private, and foreign banks, which has not been attempted in prior studies on Indian banking except by Prasad and Ghosh (2007);
- (b)
- We use panel data analysis similar to Apergis et al. (2016) to bring additional insights not found in prior studies;
- (c)
- We confirm the findings of prior studies on competition in Indian banking, using a different methodology and latest available data.
2. Theory and Literature Review
- (a)
- We use more recent data, that is, for the years, 2005–2018;
- (b)
- We examine the competitive conditions faced by ownership group of banks;
- (c)
- We use the Panzar and Rosse (1987) model as extended by Apergis et al. (2016) and apply it to the Indian context and provide new insights not available hitherto in the literature.
3. Data and Method
3.1. Data
3.2. Method
4. Results and Discussion
4.1. Stationarity Test
4.2. Estimation
5. Conclusions
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Appendix A
Variables | P | ROA | Z | GIR | TR |
---|---|---|---|---|---|
Observations | 784 | 784 | 784 | 784 | 784 |
Mean | −2.8 | −3.85 | −2.39 | 9.76 | 9.98 |
Max | −1 | −2 | −1 | 15 | 15 |
Min | −4 | −6 | −3 | 2 | 4 |
SD | 0.41 | 0.58 | 0.49 | 2.58 | 2.44 |
Variance | 0.17 | 0.33 | 0.24 | 6.66 | 5.99 |
Skewness | 1.35 | 0.39 | −0.42 | −0.87 | −0.74 |
Kurtosis | 3.68 | 4.67 | 1.26 | 2.97 | 2.62 |
Variables | FUND | WAGE | CAP | LEV | RISK | SIZE |
---|---|---|---|---|---|---|
Observations | 784 | 784 | 784 | 784 | 784 | 784 |
Mean | −3 | −4.8 | −3.94 | −4.46 | −0.75 | 12.46 |
Max | 0 | −3 | −2 | 0 | 0 | 17 |
Min | −7 | −6 | −5 | −12 | −6 | 6 |
SD | 0.52 | 0.55 | 0.43 | 2.05 | 0.7 | 2.5 |
Variance | 0.27 | 0.31 | 0.19 | 4.22 | 0.49 | 6.23 |
Skewness | −2.1 | 0.66 | 0.95 | −0.09 | −2.15 | −0.77 |
Kurtosis | 20 | 3.76 | 7.83 | 3.09 | 15.15 | 2.74 |
Levin-Lin-Chu (lag = 1) | Harris–Tzavalis | |
---|---|---|
Dependent Variable | ||
P | −3.1146 | 0.3823 |
(0.0009) | (0.0000) | |
ROA | −1.1360 | 0.3120 |
(0.1280) | (0.0000) | |
Z | −5.1795 | 0.3077 |
(0.0000) | (0.0000) | |
GIR | −8.4448 | 0.7775 |
(0.0000) | (0.2053) | |
TR | −8.0946 | 0.7952 |
(0.0000) | (0.4308) | |
Control Variable | ||
FUND | 3.2552 | 0.4119 |
(0.9994) | (0.0000) | |
WAGE | −2.0179 | 0.4337 |
(0.0218) | (0.0000) | |
CAP | 8.7533 | 0.3354 |
(1.0000) | (0.0000) | |
LEV | −5.0416 | 0.6355 |
(0.0000) | (0.0000) | |
RISK | −20.9664 | 0.5021 |
(0.0000) | (0.0000) | |
SIZE | −7.1205 | 0.8119 |
(0.0000) | (0.6682) |
Levin-Lin-Chu (lag = 1) | Harris–Tzavalis | |
---|---|---|
Dependent Variable | ||
P | −3.3197 | 0.4091 |
(0.0005) | (0.0000) | |
ROA | 1.4342 | 0.431 |
(0.9242) | (0.0000) | |
Z | −4.8722 | 0.3175 |
(0.0000) | (0.0000) | |
GIR | −6.1517 | 0.7716 |
(0.0000) | (0.2623) | |
TR | −6.0160 | 0.779 |
(0.0000) | (0.3192) | |
Control Variable | ||
FUND | 29.9577 | 0.4667 |
(1.0000) | (0.0000) | |
WAGE | −3.3910 | 0.4342 |
(0.0003) | (0.0000) | |
CAP | 10.6714 | 0.4677 |
(1.0000) | (0.0000) | |
LEV | −4.8137 | 0.6311 |
(0.0000) | (0.0001) | |
RISK | −3.3426 | 0.4772 |
(0.0004) | (0.0000) | |
SIZE | −5.4441 | 0.8107 |
(0.0000) | (0.5946) |
Levin-Lin-Chu (lag = 1) | Harris–Tzavalis | |
---|---|---|
Dependent Variable | ||
P | −1.0061 | 0.4009 |
(0.1572) | (0.0000) | |
ROA | 0.7258 | 0.2187 |
(0.7660) | (0.0000) | |
Z | −1.1228 | 0.3079 |
(0.1308) | (0.0000) | |
GIR | −3.7480 | 0.8342 |
(0.0001) | (0.7409) | |
TR | −4.0813 | 0.8795 |
(0.0000) | (0.9335) | |
Control Variable | ||
FUND | 2.1392 | 0.2952 |
(0.9838) | (0.0000) | |
WAGE | 1.2317 | 0.4508 |
(0.8910) | (0.0000) | |
CAP | 11.7123 | 0.5500 |
(1.0000) | (0.0000) | |
LEV | −2.6523 | 0.6976 |
(0.0040) | (0.0264) | |
RISK | 0.2849 | 0.4711 |
(0.6121) | (0.0000) | |
SIZE | −3.0872 | 0.8456 |
(0.0010) | (0.8054) |
Levin-Lin-Chu (lag = 1) | Harris–Tzavalis | |
---|---|---|
Dependent Variable | ||
P | −0.7975 | 0.3112 |
(0.2126) | (0.0000) | |
ROA | −3.8816 | 0.2964 |
(0.0001) | (0.0000) | |
Z | −2.4022 | 0.2943 |
(0.0081) | (0.0000) | |
GIR | −4.7150(0.0000) | 0.7288(0.0600) |
(0.0000) | (0.0600) | |
TR | −3.8617 | 0.7213 |
(0.0001) | (0.0428) | |
Control Variable | ||
FUND | −4.3949 | 0.4286 |
(0.0000) | (0.0000) | |
WAGE | −0.5895 | 0.4245 |
(0.2778) | (0.0000) | |
CAP | 0.3500 | 0.2827 |
(0.6368) | (0.0000) | |
LEV | −0.8784 | 0.6036 |
(0.1899) | (0.0000) | |
RISK | −21.1734 | 0.5282 |
(0.0000) | (0.0000) | |
SIZE | −3.7125 | 0.779 |
(0.0001) | (0.3231) |
Profit | ROA | Z | GIR | TR | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | |
OLS Regression | ||||||||||
Constant | −1.902 | 0.097 | −4.08 | 0.255 | −1.11 | 0.089 | −1.902 | 0.097 | −1.11 | 0.089 |
FUND | 0.235 | 0.013 | −0.303 | 0.036 | 0.063 | 0.012 | 0.235 | 0.013 | 0.063 | 0.012 |
WAGE | 0.019 | 0.02 | −0.368 | 0.052 | −0.072 | 0.018 | 0.019 | 0.02 | −0.072 | 0.018 |
CAP | −0.0072 | 0.024 | 0.5681 | 0.065 | 0.3609 | 0.022 | −0.0072 | 0.024 | 0.3609 | 0.022 |
LEV | −0.0284 | 0.004 | 0.0243 | 0.01 | −0.0368 | 0.003 | −0.0284 | 0.004 | −0.0368 | 0.003 |
RISK | 0.0851 | 0.012 | −0.041 | 0.031 | 0.0069 | 0.011 | 0.0851 | 0.012 | 0.0069 | 0.011 |
SIZE | −0.0066 | 0.003 | −0.0034 | 0.009 | −0.0175 | 0.003 | 0.9934 | 0.003 | 0.9825 | 0.003 |
R-squared | 0.4746 | 0.3422 | 0.4258 | 0.9959 | 0.9961 | |||||
SSE | 21.0152 | 145.445 | 17.763 | 21.015 | 17.763 | |||||
MSE | 0.02705 | 0.19 | 0.02 | 0.03 | 0.02 | |||||
N | 784 | 784 | 784 | 784 | 784 | |||||
GLS Random−effects | ||||||||||
Constant | −1.3558 | 0.111 | −3.3095 | 0.309 | −0.9096 | 0.109 | −1.3558 | 0.111 | −0.9096 | 0.109 |
FUND | 0.2998 | 0.013 | −0.1812 | 0.036 | 0.1599 | 0.012 | 0.2998 | 0.013 | 0.1599 | 0.012 |
WAGE | 0.0848 | 0.026 | 0.0807 | 0.072 | −0.0201 | 0.025 | 0.0848 | 0.026 | −0.0201 | 0.025 |
CAP | 0.0565 | 0.03 | 0.1197 | 0.084 | 0.3514 | 0.029 | 0.0565 | 0.03 | 0.3514 | 0.029 |
LEV | −0.011 | 0.006 | 0.0588 | 0.017 | −0.0198 | 0.006 | −0.011 | 0.006 | −0.0198 | 0.006 |
RISK | 0.0897 | 0.011 | −0.0997 | 0.033 | −0.0443 | 0.011 | 0.0897 | 0.011 | −0.0443 | 0.011 |
SIZE | 0.0158 | 0.006 | −0.0015 | 0.016 | 0.0088 | 0.005 | 1.0158 | 0.006 | 1.0088 | 0.005 |
R-squared | 0.4695 | 0.1159 | 0.3526 | 0.9854 | 0.9856 | |||||
SSE | 10.2518 | 83.922 | 10.334 | 10.251 | 10.334 | |||||
MSE | 0.0132 | 0.108 | 0.0133 | 0.0132 | 0.0133 | |||||
Root MSE | 0.1149 | 0.3286 | 0.1153 | 0.1149 | 0.1153 | |||||
Hausman (p-value) | 32.97 (0.0001) | 35.65 (0.0001) | 240.07 (0.0001) | 32.97 (0.0001) | 240.07 (0.0001) | |||||
N | 784 | 784 | 784 | 784 | 784 | |||||
Fixed effects | ||||||||||
Constant | −1.3378 | 0.127 | −3.6582 | 0.362 | −1.0624 | 0.125 | −1.3378 | 0.127 | −1.0624 | 0.125 |
FUND | 0.3065 | 0.013 | −0.1496 | 0.038 | 0.1761 | 0.013 | 0.3065 | 0.013 | 0.1761 | 0.013 |
WAGE | 0.1121 | 0.029 | 0.2617 | 0.084 | 0.0192 | 0.029 | 0.1121 | 0.029 | 0.0192 | 0.029 |
CAP | 0.0561 | 0.033 | −0.0655 | 0.095 | 0.3239 | 0.033 | 0.0561 | 0.033 | 0.3239 | 0.033 |
LEV | −0.0091 | 0.007 | 0.0575 | 0.021 | −0.0157 | 0.007 | −0.0091 | 0.007 | −0.0157 | 0.007 |
RISK | 0.088 | 0.012 | −0.1017 | 0.035 | −0.0552 | 0.012 | 0.088 | 0.012 | −0.0552 | 0.012 |
SIZE | 0.0283 | 0.007 | 0.0078 | 0.021 | 0.0317 | 0.007 | 1.0283 | 0.007 | 1.0317 | 0.007 |
R-squared | 0.7677 | 0.6573 | 0.7055 | 0.9982 | 0.998 | |||||
SSE | 9.3633 | 76.3448 | 9.1797 | 9.3633 | 9.1797 | |||||
MSE | 0.013 | 0.1057 | 0.0127 | 0.013 | 0.0127 | |||||
Root MSE | 0.1139 | 0.3252 | 0.1128 | 0.1139 | 0.1128 | |||||
F Test | 16.34 (0.0001) | 11.88 (0.0001) | 12.27 (0.0001) | 16.34 (0.0001) | 12.27 (0.0001) | |||||
(p-value) | ||||||||||
N | 784 | 784 | 784 | 784 | 784 |
PROFIT | ROA | Z | GIR | TR | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | |
OLS Regression | ||||||||||
Constant | −0.2619 | 0.2216 | −3.9606 | 0.6436 | −0.17 | 0.195 | −0.261 | 0.221 | −0.17 | 0.195 |
FUND | 0.3744 | 0.0322 | −0.6146 | 0.0936 | 0.3426 | 0.028 | 0.374 | 0.032 | 0.342 | 0.028 |
WAGE | 0.2797 | 0.0488 | −0.2963 | 0.1418 | 0.1348 | 0.043 | 0.279 | 0.048 | 0.134 | 0.043 |
CAP | −0.1015 | 0.0708 | 0.5672 | 0.2057 | 0.1078 | 0.062 | −0.101 | 0.07 | 0.107 | 0.062 |
LEV | −0.0181 | 0.0082 | −0.1074 | 0.0239 | −0.023 | 0.007 | −0.018 | 0.008 | −0.023 | 0.007 |
RISK | 0.2955 | 0.0619 | 0.5283 | 0.1798 | 0.1502 | 0.054 | 0.295 | 0.061 | 0.1502 | 0.054 |
SIZE | −0.0251 | 0.0089 | −0.0872 | 0.0257 | −0.022 | 0.007 | 0.9749 | 0.008 | 0.9773 | 0.007 |
R-squared | 0.4402 | 0.3229 | 0.4075 | 0.9921 | 0.9938 | |||||
SSE | 1.9541 | 16.4902 | 1.514 | 1.9541 | 1.514 | |||||
MSE | 0.00681 | 0.0575 | 0.0053 | 0.0068 | 0.0053 | |||||
N | 294 | 294 | 294 | 294 | 294 | |||||
GLS Random-effects | ||||||||||
Constant | −1.015 | 0.2413 | −4.4912 | 0.6996 | −0.714 | 0.215 | −1.015 | 0.241 | −0.714 | 0.215 |
FUND | 0.3276 | 0.0329 | −0.6903 | 0.0954 | 0.3089 | 0.029 | 0.3276 | 0.032 | 0.3089 | 0.029 |
WAGE | 0.358 | 0.0606 | 0.1351 | 0.174 | 0.2151 | 0.053 | 0.358 | 0.06 | 0.2151 | 0.053 |
CAP | −0.1703 | 0.0795 | −0.0352 | 0.2295 | 0.029 | 0.07 | −0.17 | 0.079 | 0.029 | 0.07 |
LEV | −0.0155 | 0.0112 | −0.0696 | 0.032 | −0.016 | 0.009 | −0.015 | 0.011 | −0.016 | 0.009 |
RISK | 0.2176 | 0.0609 | 0.4738 | 0.1774 | 0.1 | 0.054 | 0.2176 | 0.06 | 0.1 | 0.054 |
SIZE | 0.0219 | 0.0108 | −0.0876 | 0.0311 | 0.0126 | 0.009 | 1.0219 | 0.01 | 1.0126 | 0.009 |
R-squared | 0.4686 | 0.2915 | 0.4188 | 0.9894 | 0.9913 | |||||
SSE | 1.4573 | 12.445 | 1.1853 | 1.4573 | 1.1853 | |||||
MSE | 0.0051 | 0.0434 | 0.0041 | 0.0051 | 0.0041 | |||||
Root MSE | 0.0713 | 0.2082 | 0.0643 | 0.0713 | 0.0643 | |||||
Hausman (p value) | 41.34 (0.0001) | 14.73 (0.0001) | 29.01 (0.0001) | 41.34 (0.000) | 29.01 (0.0001) | |||||
N | 294 | 294 | 294 | 294 | 294 | |||||
Fixed effects | ||||||||||
Constant | −1.2473 | 0.2459 | −4.7661 | 0.7327 | −0.9452 | 0.223 | −1.247 | 0.245 | −0.9452 | 0.223 |
FUND | 0.2855 | 0.0338 | −0.6796 | 0.1008 | 0.2745 | 0.03 | 0.2855 | 0.033 | 0.2745 | 0.03 |
WAGE | 0.4305 | 0.0674 | 0.4147 | 0.2008 | 0.3001 | 0.061 | 0.4305 | 0.067 | 0.3001 | 0.061 |
CAP | −0.2178 | 0.0848 | −0.3963 | 0.2528 | −0.0391 | 0.077 | −0.217 | 0.084 | −0.0391 | 0.077 |
LEV | −0.0306 | 0.0133 | −0.0167 | 0.0398 | −0.0241 | 0.012 | −0.03 | 0.013 | −0.0241 | 0.012 |
RISK | 0.192 | 0.0606 | 0.473 | 0.1806 | 0.0789 | 0.055 | 0.192 | 0.06 | 0.0789 | 0.055 |
SIZE | 0.0393 | 0.0115 | −0.0709 | 0.0342 | 0.0302 | 0.01 | 1.0393 | 0.011 | 1.0302 | 0.01 |
R-squared | 0.6416 | 0.544 | 0.5959 | 0.9949 | 0.9958 | |||||
SSE | 1.2772 | 11.3384 | 1.054 | 1.2772 | 1.054 | |||||
MSE | 0.0048 | 0.0425 | 0.0039 | 0.0048 | 0.0039 | |||||
Root MSE | 0.0692 | 0.2061 | 0.0628 | 0.0692 | 0.0628 | |||||
F Test (p value) | 7.07 (0.0001) | 6.07 (0.0001) | 5.83 (0.0001) | 7.07 (0.0001) | 5.83 (0.0001) | |||||
N | 294 | 294 | 294 | 294 | 294 |
PROFIT | ROA | Z | GIR | TR | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | |
OLS Regression | ||||||||||
Constant | −0.6364 | 0.1471 | −5.0951 | 0.5282 | −0.608 | 0.1264 | −0.636 | 0.1471 | −0.608 | 0.1264 |
FUND | 0.3949 | 0.0289 | −0.2476 | 0.1037 | 0.3727 | 0.0248 | 0.3949 | 0.0289 | 0.3727 | 0.0248 |
WAGE | 0.1291 | 0.0266 | −0.1179 | 0.0955 | 0.0008 | 0.0229 | 0.1291 | 0.0266 | 0.0008 | 0.0229 |
CAP | −0.0145 | 0.0335 | 0.3042 | 0.1201 | 0.1587 | 0.0288 | −0.014 | 0.0335 | 0.1587 | 0.0288 |
LEV | −0.0219 | 0.004 | −0.0751 | 0.0142 | −0.021 | 0.0034 | −0.021 | 0.004 | −0.021 | 0.0034 |
RISK | 0.2095 | 0.0554 | −0.0892 | 0.1988 | 0.1791 | 0.0476 | 0.2095 | 0.0554 | 0.1791 | 0.0476 |
SIZE | −0.0211 | 0.0051 | 0.0539 | 0.0182 | −0.011 | 0.0044 | 0.9789 | 0.0051 | 0.9886 | 0.0044 |
R-squared | 0.6458 | 0.2575 | 0.6864 | 0.9974 | 0.9982 | |||||
SSE | 1.2431 | 16.0199 | 0.918 | 1.2431 | 0.918 | |||||
MSE | 0.00612 | 0.08 | 0 | 0.01 | 0 | |||||
N | 210 | 210 | 210 | 210 | 210 | |||||
GLS Random-effects | ||||||||||
Constant | −0.3591 | 0.182 | −5.7289 | 0.7529 | −0.492 | 0.1708 | −0.359 | 0.182 | −0.492 | 0.1708 |
FUND | 0.5072 | 0.0254 | −0.2745 | 0.1123 | 0.4263 | 0.0243 | 0.5072 | 0.0254 | 0.4263 | 0.0243 |
WAGE | 0.1084 | 0.0302 | 0.1109 | 0.1269 | 0.035 | 0.0285 | 0.1084 | 0.0302 | 0.035 | 0.0285 |
CAP | 0.0179 | 0.0425 | −0.1218 | 0.1748 | 0.132 | 0.0398 | 0.0179 | 0.0425 | 0.132 | 0.0398 |
LEV | −0.0101 | 0.0057 | −0.05 | 0.0229 | −0.012 | 0.0053 | −0.01 | 0.0057 | −0.012 | 0.0053 |
RISK | 0.1338 | 0.0593 | 0.0919 | 0.2515 | 0.1098 | 0.056 | 0.1338 | 0.0593 | 0.1098 | 0.056 |
SIZE | −0.0139 | 0.0066 | 0.0689 | 0.0267 | −0.003 | 0.0062 | 0.9861 | 0.0066 | 0.9966 | 0.0062 |
R-squared | 0.763 | 0.1062 | 0.7385 | 0.9968 | 0.9971 | |||||
SSE | 0.5505 | 12.0176 | 0.5245 | 0.5505 | 0.5245 | |||||
MSE | 0.0027 | 0.0592 | 0.0026 | 0.0027 | 0.0026 | |||||
Root MSE | 0.0521 | 0.2433 | 0.0508 | 0.0521 | 0.0508 | |||||
Hausman (p value) | 9.71 (0.1372) | 7.57 (0.271) | 4.94 (0.5521) | 9.71 (0.1372) | 4.94 (0.5521) | |||||
N | 210 | 210 | 210 | 210 | 210 | |||||
Fixed effects | ||||||||||
Constant | −0.2914 | 0.1943 | −5.6543 | 0.9044 | −0.425 | 0.1903 | −0.291 | 0.1943 | −0.425 | 0.1903 |
FUND | 0.5138 | 0.0262 | −0.2584 | 0.1221 | 0.432 | 0.0257 | 0.5138 | 0.0262 | 0.432 | 0.0257 |
WAGE | 0.0977 | 0.0322 | 0.296 | 0.1501 | 0.038 | 0.0316 | 0.0977 | 0.0322 | 0.038 | 0.0316 |
CAP | 0.0369 | 0.0459 | −0.4362 | 0.2135 | 0.1344 | 0.0449 | 0.0369 | 0.0459 | 0.1344 | 0.0449 |
LEV | −0.0064 | 0.0063 | −0.0398 | 0.0292 | −0.007 | 0.0061 | −0.006 | 0.0063 | −0.007 | 0.0061 |
RISK | 0.12 | 0.063 | 0.2972 | 0.293 | 0.0965 | 0.0616 | 0.12 | 0.063 | 0.0965 | 0.0616 |
SIZE | −0.0112 | 0.0073 | 0.0539 | 0.0341 | 0 | 0.0072 | 0.9888 | 0.0073 | 0.9992 | 0.0072 |
R-squared | 0.8584 | 0.5008 | 0.8372 | 0.999 | 0.9991 | |||||
SSE | 0.5118 | 11.0903 | 0.4908 | 0.5118 | 0.4908 | |||||
MSE | 0.0027 | 0.0587 | 0.0026 | 0.0027 | 0.0026 | |||||
Root MSE | 0.052 | 0.2422 | 0.051 | 0.052 | 0.051 | |||||
F Test (p value) | 19.29 (0.0001) | 6.00 (0.0001) | 11.75 (0.0001) | 19.29 (0.0001) | 11.75 (0.0001) | |||||
N | 210 | 210 | 210 | 210 | 210 |
PROFIT | ROA | Z | GIR | TR | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | Coef. | Std. Err. | |
OLS Regression | ||||||||||
Constant | −2.2339 | 0.156 | −4.3354 | 0.402 | −1.0492 | 0.149 | −2.2339 | 0.156 | −1.0492 | 0.149 |
FUND | 0.2198 | 0.021 | −0.3492 | 0.053 | 0.0393 | 0.02 | 0.2198 | 0.021 | 0.0393 | 0.02 |
WAGE | −0.118 | 0.039 | −0.1008 | 0.1 | −0.0962 | 0.037 | −0.118 | 0.039 | −0.0962 | 0.037 |
CAP | 0.1057 | 0.047 | 0.2666 | 0.122 | 0.4141 | 0.045 | 0.1057 | 0.047 | 0.4141 | 0.045 |
LEV | 0.0146 | 0.011 | 0.0855 | 0.028 | −0.0215 | 0.01 | 0.0146 | 0.011 | −0.0215 | 0.01 |
RISK | 0.0538 | 0.016 | −0.0471 | 0.043 | −0.0072 | 0.016 | 0.0538 | 0.016 | −0.0072 | 0.016 |
SIZE | 0.0022 | 0.006 | 0.0419 | 0.017 | −0.0213 | 0.006 | 1.0022 | 0.006 | 0.9787 | 0.006 |
R-squared | 0.3767 | 0.2416 | 0.495 | 0.992 | 0.9916 | |||||
SSE | 13.225 | 87.1541 | 12.0194 | 13.225 | 12.0194 | |||||
MSE | 0.04844 | 0.32 | 0.04 | 0.05 | 0.04 | |||||
N | 280 | 280 | 280 | 280 | 280 | |||||
GLS Random-effects | ||||||||||
Constant | −1.615 | 0.198 | −2.9805 | 0.506 | −0.6561 | 0.188 | −1.615 | 0.198 | −0.6561 | 0.188 |
FUND | 0.2816 | 0.02 | −0.1593 | 0.052 | 0.1248 | 0.019 | 0.2816 | 0.02 | 0.1248 | 0.019 |
WAGE | −0.0083 | 0.05 | 0.0661 | 0.128 | −0.0182 | 0.047 | −0.0083 | 0.05 | −0.0182 | 0.047 |
CAP | 0.1145 | 0.055 | 0.1337 | 0.141 | 0.3961 | 0.052 | 0.1145 | 0.055 | 0.3961 | 0.052 |
LEV | 0.0137 | 0.014 | 0.1569 | 0.037 | 0.0039 | 0.013 | 0.0137 | 0.014 | 0.0039 | 0.013 |
RISK | 0.08 | 0.018 | −0.1246 | 0.046 | −0.0572 | 0.017 | 0.08 | 0.018 | −0.0572 | 0.017 |
SIZE | 0.0169 | 0.013 | 0.0031 | 0.033 | −0.0037 | 0.012 | 1.0169 | 0.013 | 0.9963 | 0.012 |
R-squared | 0.4306 | 0.1469 | 0.3981 | 0.9698 | 0.9673 | |||||
SSE | 7.8402 | 51.22 | 7.1054 | 7.8402 | 7.1054 | |||||
MSE | 0.0287 | 0.1876 | 0.026 | 0.0287 | 0.026 | |||||
Root MSE | 0.1695 | 0.4332 | 0.1613 | 0.1695 | 0.1613 | |||||
Hausman (p value) | 21.83 (0.0013) | 13.17 (0.0405) | 24.27 (0.0005) | 21.83 (0.0013) | 8.67 (0.0005) | |||||
N | 280 | 280 | 280 | 280 | 280 | |||||
Fixed effects | ||||||||||
Constant | −1.6299 | 0.255 | −1.9271 | 0.656 | −0.7451 | 0.243 | −1.6299 | 0.255 | −0.7451 | 0.243 |
FUND | 0.2964 | 0.021 | −0.135 | 0.054 | 0.143 | 0.02 | 0.2964 | 0.021 | 0.143 | 0.02 |
WAGE | 0.0532 | 0.056 | 0.0813 | 0.146 | 0.0041 | 0.054 | 0.0532 | 0.056 | 0.0041 | 0.054 |
CAP | 0.1107 | 0.06 | 0.061 | 0.154 | 0.3963 | 0.057 | 0.1107 | 0.06 | 0.3963 | 0.057 |
LEV | 0.0035 | 0.016 | 0.1711 | 0.042 | 0.0073 | 0.015 | 0.0035 | 0.016 | 0.0073 | 0.015 |
RISK | 0.0795 | 0.019 | −0.12 | 0.049 | −0.0687 | 0.018 | 0.0795 | 0.019 | −0.0687 | 0.018 |
SIZE | 0.0397 | 0.018 | −0.0388 | 0.046 | 0.0179 | 0.017 | 1.0397 | 0.018 | 1.0179 | 0.017 |
R-squared | 0.6708 | 0.5977 | 0.733 | 0.9958 | 0.9956 | |||||
SSE | 7.1387 | 47.248 | 6.4944 | 7.1387 | 6.4944 | |||||
MSE | 0.0281 | 0.186 | 0.0256 | 0.0281 | 0.0256 | |||||
Root MSE | 0.1676 | 0.4313 | 0.1599 | 0.1676 | 0.1599 | |||||
F Test (p value) | 11.40 (0.0001) | 11.29 (0.0001) | 11.37 (0.0001) | 11.40 (0.0001) | 24.27 (0.0001) | |||||
N | 280 | 280 | 280 | 280 | 280 |
PROFIT | ROA | Z | GIR | TR | |
---|---|---|---|---|---|
H statistic | 0.4747 | 0.0466 | 0.5191 | 0.4747 | 0.5191 |
Test H = 0 | |||||
F | 322.0077 | 0.3813 | 394.2126 | 322.0077 | 394.2126 |
p | 0.0000 | 0.5371 | 0.0000 | 0.0000 | 0.0000 |
Test H = 1 | |||||
F | 394.2846 | 159.7540 | 338.1969 | 394.2846 | 338.1969 |
p | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
PROFIT | ROA | Z | GIR | TR | |
---|---|---|---|---|---|
H statistic | 0.49825 | −0.66117 | 0.5355 | 0.498251 | 0.535525 |
Test H = 0 | |||||
F | NA | NA | NA | NA | 2238.4359 |
p | NA | NA | NA | NA | 0.0000 |
Test H = 1 | |||||
F | 31.3958 | 51.3694 | 25.1026 | 31.3958 | 25.1026 |
p | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
PROFIT | ROA | Z | GIR | TR | |
---|---|---|---|---|---|
H statistic | 0.648402 | −0.39855 | 0.6045 | 0.648402 | 0.6045 |
Test H = 0 | |||||
F | 121.8889 | 15.29983 | 89.34615 | 121.8889 | 89.34615 |
p | 0.0000 | 0.000128 | 0.0000 | 0.0000 | 0.0000 |
Test H = 1 | |||||
F | 93.74074 | 68.00511 | 119.4615 | 93.74074 | 119.4615 |
p | 0.0000 | 2.71 × 10−14 | 0.0000 | 0.0000 | 0.0000 |
PROFIT | ROA | Z | GIR | TR | |
---|---|---|---|---|---|
H statistic | 0.460325 | 0.007275 | 0.543523 | 0.460325 | 0.543523 |
Test H = 0 | |||||
F | 83.96797 | 0.003226 | 128.4961 | 83.96797 | 128.4961 |
p | 0.0000 | 0.954752 | 0.0000 | 0.0000 | 0.0000 |
Test H = 1 | |||||
F | 115.4128 | 58.99892 | 90.63281 | 115.4128 | 90.63281 |
p | 0.0000 | 3.42 × 10−13 | 0.0000 | 0.0000 | 0.0000 |
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1 | As noted by Mohapatra and Jha (2018), the Modi government infused Rs 66.90 billion in the public sector banks during 2014–2015 and Rs 250 billion each in the years 2015–2016 and 2016–2017. It further intended to infuse Rs 880 billion in 2017–2018. |
Variable | Description |
---|---|
Ratio of gross interest revenue to total assets for bank i at time t, which is a proxy for loan prices | |
Ratio of interest expenses to total deposits and money market funds for bank i at time t, which is a proxy for average funding cost | |
Ratio of personnel expenses to total assets for bank i at time t, which is a proxy for wage rate | |
Ratio of operating and administrative expenses to total assets for bank i at time t, which is a proxy for the price for physical capital employed | |
Ratio of equity to total assets for bank i at time t, which is a proxy for the leverage | |
Ratio of net loans to total assets for bank i at time t, which is a proxy for the credit risk | |
Total assets | |
Represents pre-tax return on assets | |
Ratio of total revenue to total assets for bank i at time t | |
Gross interest revenue | |
Total revenue |
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Li, Z.; Liu, S.; Meng, F.; Sathye, M. Competition in the Indian Banking Sector: A Panel Data Approach. J. Risk Financial Manag. 2019, 12, 136. https://doi.org/10.3390/jrfm12030136
Li Z, Liu S, Meng F, Sathye M. Competition in the Indian Banking Sector: A Panel Data Approach. Journal of Risk and Financial Management. 2019; 12(3):136. https://doi.org/10.3390/jrfm12030136
Chicago/Turabian StyleLi, Zhiheng, Shuangzhe Liu, Fanda Meng, and Milind Sathye. 2019. "Competition in the Indian Banking Sector: A Panel Data Approach" Journal of Risk and Financial Management 12, no. 3: 136. https://doi.org/10.3390/jrfm12030136