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Fungáčová, Z.; Poghosyan, T., Determinants of bank interest margins in Russia: Does bank ownership matter? Economic Systems. 35 (4). 481-495. 2011.

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Article

Do Competition, Size, and Development Indicators Matter for the Efficiency of BRICS Banks?

1Department of Finance, University of Chittagong

2Department of Management, University of Chittagong


Journal of Finance and Economics. 2021, Vol. 9 No. 2, 53-64
DOI: 10.12691/jfe-9-2-2
Copyright © 2021 Science and Education Publishing

Cite this paper:
Anupam Das Gupta, Ishrat Sultana, Dipa Das. Do Competition, Size, and Development Indicators Matter for the Efficiency of BRICS Banks?. Journal of Finance and Economics. 2021; 9(2):53-64. doi: 10.12691/jfe-9-2-2.

Correspondence to: Anupam  Das Gupta, Department of Finance, University of Chittagong. Email: anupam@cu.ac.bd

Abstract

This study investigates the effect of competition, size, and development indicators on efficiency using the panel data of 1137 BRICS (Brazil, Russia, India, China, South Africa) banks over sixteen years 2000-2015. The core finding of the two-step system generalized methods of moments (2GMM) are: (i) Both competition and size have a significant positive association with the efficiency of BRICS banks. (ii) No significant association between inflation and efficiency is observed; whereas, economic progression (gross domestic products) has a positive effect on the efficiency of revenue and inverse effect on cost efficiency. (iii) The interim term size and competition have a homogeneous effect on each type of efficiency; however, the outcomes are heterogeneous when efficiency measures change. Finally, the study evidences the nonlinear relationship of competition, size, and development indicators of BRICS banks.

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