Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171581
Authors: 
Bretschger, Lucas
Kappel, Vivien
Year of Publication: 
2010
Series/Report no.: 
Economics Working Paper Series 10/138
Abstract: 
According to theory, market concentration affects the likelihood of a financial crisis in different ways. The “concentration-stability” and the “concentrationfragility” hypotheses suggest opposing effects operating through specific channels. Using data of 160 countries for the period 1970-2007, this paper empirically tests these indirect effects of financial market structure. We set up a simultaneous system in order to jointly estimate financial stability and the relevant channel variables as endogenous variables. Our findings provide support for the assumption of channel effects in general and both the concentrationstability and the concentration-fragility hypothesis in particular. The effects are found to vary between high and low income countries.
Subjects: 
Market Concentration
Financial Crisis
Systemic Crisis
JEL: 
G01
G21
E32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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