---
_id: '62999'
abstract:
- lang: eng
  text: <jats:sec><jats:title content-type="abstract-subheading">Purpose</jats:title><jats:p>Academic
    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.</jats:p></jats:sec><jats:sec><jats:title
    content-type="abstract-subheading">Design/methodology/approach</jats:title><jats:p>Using
    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.</jats:p></jats:sec><jats:sec><jats:title
    content-type="abstract-subheading">Findings</jats:title><jats:p>Our 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.</jats:p></jats:sec><jats:sec><jats:title content-type="abstract-subheading">Originality/value</jats:title><jats:p>Our
    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.</jats:p></jats:sec>
author:
- first_name: Sarah
  full_name: Herwald, Sarah
  id: '51867'
  last_name: Herwald
- first_name: Simone
  full_name: Voigt, Simone
  id: '50109'
  last_name: Voigt
- first_name: André
  full_name: Uhde, André
  id: '36049'
  last_name: Uhde
citation:
  ama: Herwald S, Voigt S, Uhde A. The impact of market concentration and market power
    on banking stability – evidence from Europe. <i>The Journal of Risk Finance</i>.
    2024;25(3):510-536. doi:<a href="https://doi.org/10.1108/jrf-03-2023-0075">10.1108/jrf-03-2023-0075</a>
  apa: Herwald, S., Voigt, S., &#38; Uhde, A. (2024). The impact of market concentration
    and market power on banking stability – evidence from Europe. <i>The 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 impact of market concentration
    and market power on banking stability – evidence from Europe}, volume={25}, DOI={<a
    href="https://doi.org/10.1108/jrf-03-2023-0075">10.1108/jrf-03-2023-0075</a>},
    number={3}, journal={The Journal of Risk Finance}, publisher={Emerald}, author={Herwald,
    Sarah and Voigt, Simone and Uhde, André}, year={2024}, pages={510–536} }'
  chicago: 'Herwald, Sarah, Simone Voigt, and André Uhde. “The Impact of Market Concentration
    and Market Power on Banking Stability – Evidence from Europe.” <i>The 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 impact of market concentration and
    market power on banking stability – evidence from Europe,” <i>The 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">10.1108/jrf-03-2023-0075</a>.'
  mla: Herwald, Sarah, et al. “The Impact of Market Concentration and Market Power
    on Banking Stability – Evidence from Europe.” <i>The Journal of Risk Finance</i>,
    vol. 25, no. 3, Emerald, 2024, pp. 510–36, doi:<a href="https://doi.org/10.1108/jrf-03-2023-0075">10.1108/jrf-03-2023-0075</a>.
  short: S. Herwald, S. Voigt, A. Uhde, The Journal of Risk Finance 25 (2024) 510–536.
date_created: 2025-12-09T14:42:44Z
date_updated: 2025-12-09T14:48:50Z
department:
- _id: '19'
doi: 10.1108/jrf-03-2023-0075
intvolume: '        25'
issue: '3'
language:
- iso: eng
page: 510-536
publication: The Journal of Risk Finance
publication_identifier:
  issn:
  - 1526-5943
publication_status: published
publisher: Emerald
status: public
title: The impact of market concentration and market power on banking stability –
  evidence from Europe
type: journal_article
user_id: '50109'
volume: 25
year: '2024'
...