Does Banking Competition Enhance or Mitigate Risk? New Evidence from OECD Countries

Authors : Özlem Karadağ Ak, Şenol Babuşcu, Adalet Hazar

Pages : 926-948

Doi:10.30784/epfad.1695468

View : 104 | Download : 163

Publication Date : 2025-09-30

Article Type : Research Paper

Abstract :The primary aim of the study is to question the relationship between competition and risk-taking behavior in banks in recent years, when competition and risks have significantly differentiated, and to provide new evidence. In addition, it is also aimed to question the impact of the level of financial development on the relationship between competition and risk. In this context, the study is the first of its kind in the literature. A comprehensive study was conducted with the data of 6,478 banks operating in OECD (Organization for Economic Co-operation and Development) member countries for the period 2013-2021. Panel data analysis results obtained from the nexus between competition and risk-taking behavior are found to be consistent with the ‘Competition-stability’ view. The results are also consistent with the ‘Non-linear’ view, revealing a non-linear relationship between competition and risk-taking behavior, which is formed according to banks\\\' actions by the position they have taken according to the situation of the sector.
Keywords : Rekabet, Risk Alma Davranışı, Finansal Gelişme, Bankacılık Sektörü, Panel Veri Analizi

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