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Diversification strategy and bank market power: does foreign ownership matter?

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ABSTRACT This paper examines whether bank diversification strategy enhances bank market power and how foreign ownership affects this relationship. Using data from Chinese commercial banks for the period 2007–2018, we… Click to show full abstract

ABSTRACT This paper examines whether bank diversification strategy enhances bank market power and how foreign ownership affects this relationship. Using data from Chinese commercial banks for the period 2007–2018, we find that diversification strategy has a positive impact on bank market power and foreign ownership reinforces this effect. Results hold for bank income, non-interest income and asset diversification strategies.

Keywords: foreign ownership; power foreign; market power; diversification strategy; bank market; bank

Journal Title: Applied Economics Letters
Year Published: 2020

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