---
_id: '34802'
abstract:
- lang: eng
  text: "Purpose\r\nAcademic research has intensively analyzed the relationship between
    market concentration or market power and banking stability but provides ambiguous
    results, which are summarized under the concentration-stability/fragility view.
    We provide empirical evidence that the mixed results are due to the difficulty
    of identifying reliable variables to measure concentration and market power.\r\n\r\nDesign/methodology/approach\r\nUsing
    data from 3,943 banks operating in the European Union (EU)-15 between 2013 and
    2020, we employ linear regression models on panel data. Banking market concentration
    is measured by the Herfindahl–Hirschman Index (HHI), and market power is estimated
    by the product-specific Lerner Indices for the loan and deposit market, respectively.\r\n\r\nFindings\r\nOur
    analysis reveals a significantly stability-decreasing impact of market concentration
    (HHI) and a significantly stability-increasing effect of market power (Lerner
    Indices). In addition, we provide evidence for a weak (or even absent) empirical
    relationship between the (non)structural measures, challenging the validity of
    the structure-conduct-performance (SCP) paradigm. Our baseline findings remain
    robust, especially when controlling for a likely reverse causality.\r\n\r\nOriginality/value\r\nOur
    results suggest that the HHI may reflect other factors beyond market power that
    influence banking stability. Thus, banking supervisors and competition authorities
    should investigate market concentration and market power simultaneously while
    considering their joint impact on banking stability."
author:
- first_name: Sarah
  full_name: Herwald, Sarah
  last_name: Herwald
- first_name: Simone
  full_name: Voigt, Simone
  last_name: Voigt
- first_name: André
  full_name: Uhde, André
  id: '36049'
  last_name: Uhde
  orcid: https://orcid.org/0000-0002-8058-8857
citation:
  ama: Herwald S, Voigt S, Uhde A. The conditional impact of market consolidation
    and market power on banking stability – Evidence from Europe. <i>Journal of Risk
    Finance</i>. 2024;25(3):510-536. doi:<a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>
  apa: Herwald, S., Voigt, S., &#38; Uhde, A. (2024). The conditional impact of market
    consolidation and market power on banking stability – Evidence from Europe. <i>Journal
    of Risk Finance</i>, <i>25</i>(3), 510–536. <a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>
  bibtex: '@article{Herwald_Voigt_Uhde_2024, title={The conditional impact of market
    consolidation and market power on banking stability – Evidence from Europe}, volume={25},
    DOI={<a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>},
    number={3}, journal={Journal of Risk Finance}, author={Herwald, Sarah and Voigt,
    Simone and Uhde, André}, year={2024}, pages={510–536} }'
  chicago: 'Herwald, Sarah, Simone Voigt, and André Uhde. “The Conditional Impact
    of Market Consolidation and Market Power on Banking Stability – Evidence from
    Europe.” <i>Journal of Risk Finance</i> 25, no. 3 (2024): 510–36. <a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>.'
  ieee: 'S. Herwald, S. Voigt, and A. Uhde, “The conditional impact of market consolidation
    and market power on banking stability – Evidence from Europe,” <i>Journal of Risk
    Finance</i>, vol. 25, no. 3, pp. 510–536, 2024, doi: <a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>.'
  mla: Herwald, Sarah, et al. “The Conditional Impact of Market Consolidation and
    Market Power on Banking Stability – Evidence from Europe.” <i>Journal of Risk
    Finance</i>, vol. 25, no. 3, 2024, pp. 510–36, doi:<a href="https://doi.org/10.1108/JRF-03-2023-0075">https://doi.org/10.1108/JRF-03-2023-0075</a>.
  short: S. Herwald, S. Voigt, A. Uhde, Journal of Risk Finance 25 (2024) 510–536.
date_created: 2022-12-22T07:28:25Z
date_updated: 2024-05-14T12:13:51Z
department:
- _id: '186'
- _id: '188'
doi: https://doi.org/10.1108/JRF-03-2023-0075
intvolume: '        25'
issue: '3'
jel:
- G15
- G21
- G38
keyword:
- market concentration
- market power
- banking stability
- European banking
language:
- iso: eng
page: 510 - 536
publication: Journal of Risk Finance
publication_status: published
status: public
title: The conditional impact of market consolidation and market power on banking
  stability – Evidence from Europe
type: journal_article
user_id: '36049'
volume: 25
year: '2024'
...