Does banks concentration matter for loans placement: evidence of the construction sector in the Republic of Srpska?

Almir Alihodžić , Anna Zielińska-Chmielewska

Abstract

Bank concentration has negative implications for the economic growth of countries dependent on extreme indebtedness and whose financial sector is underdeveloped, or where banks play a crucial role. In countries with a high level of corporate governance, bank concentration is less detrimental to economic growth. Competition is significant for the banking system, as it affects the efficiency and quality of the offered services. Also, competition has reflections on other sectors of the economy. Increased competition in the banking sector is associated with the fast growth of other areas of the economy relying on external financing. The primary goal of this paper is to determine the strength and significance of banking concentration in the Republic of Srpska, and the orientation of bank loans to the construction sector of the Republic of Srpska. Therefore, the goal is to test the dependence of the construction sector of the Republic of Srpska on bank loans of three to four largest banks in the system. The participation of long-term debt to total debt will be used as the dependent variable, while the concentration index – (CR3) for the three largest banks in the system, HHI index, the growth rate of loans to the real sector, the consumer price index, current assets by total assets, return on assets and the growth rate of non-performing loans and short-term debt total liabilities will be used as independent variables. In this paper will be used correlation analysis as well as testing theoretical and empirical F-test. Also, in this paper, the STATA 13.0 software package will be used. This data analysis will include semi-annual basis data for the period: 2007 – 2017.
Author Almir Alihodžić - University of Zenica
Almir Alihodžić,,
-
, Anna Zielińska-Chmielewska (WT / KKG)
Anna Zielińska-Chmielewska,,
- Department of Business Activity
Journal seriesProceedings of International Scientific Symposium "Economy of Eastern Croatia - Vision and Growth" , ISSN 1848-9559, (0 pkt)
Issue year2019
Pages366-379
Publication size in sheets0.65
Conference8th International Scientific Symposium Economy of Eastern Croatia - Vision and Growth, 30-05-2019 - 31-05-2019, Osijek, Chorwacja
Keywords in Polishkoncentracja, rywalizacja, sektor budowlany
Keywords in Englishconcentration, competition, construction sector
URL http://www.efos.unios.hr/gospodarstvo-istocne-hrvatske/wp-content/uploads/sites/20/2019/05/GIH-2019-program-Mk10.pdf
Languageen angielski
Score (nominal)5
Score sourcejournalList
ScoreMinisterial score = 5.0, 08-06-2020, ArticleFromJournal
Publication indicators WoS Citations = 0
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