Market Structure, Scale Efficiency, and Risk as Determinants of German Banking Profitability

Arbeitspapier

The Scale-Efficiency version of the Efficient-Structure Hypothesis and the Structure-Conduct-Performance Hypothesis find empirical support in German banking data from 1998 to 2002. Due to the acceptance of the two hypotheses and the existence of overall economies of scale, we conclude that German banks may improve their profitability by increasing their asset size and/or by consolidation. The increased banking profitability will not only come from monopolistic power (higher concentration rate) but also from the scale efficiency benefit. We also find that portfolio risk is a key factor in determining the profit-structure relationship.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tübinger Diskussionsbeiträge ; No. 294

Classification and Topics

• Classification: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Information and Market Efficiency; Event Studies; Insider Trading ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: Profit-structure relationship ; Market Structure ; Scale efficiency ; Portfolio Risk ; Bank ; Rentabilität ; Struktur-Performance-Modell ; Skalenertrag ; Bankrisiko ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Yu, Peiyi ; Neus, Werner
• Event: Veröffentlichung
• (who): Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
• (where): Tübingen
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/22093
• URN: urn:nbn:de:bsz:21-opus-17875
• Last update: 10.03.2025, 11:41 AM CET