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VNUHCM Journal of

Science and Technology Development

An official journal of Viet Nam National University Ho Chi Minh City, Viet Nam since 1997

ISSN: 1859-0128
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Economics, Law and Management - Research article Open Access Logo

INCOME STRUTURE, CAPITAL STRUCTURE, BANK COMPETITION AND ECONOMIC INSTABILITY

Liem Thanh Nguyen 1, *
Khoa Chi Pham 1

  1. University of Economics and Law, VNU HCM
Correspondence to: Liem Thanh Nguyen, University of Economics and Law, VNU HCM. Email: pvphuc@vnuhcm.edu.vn.
Volume & Issue: Vol. 18 No. 2 (2015) | Page No.: 56-67 | DOI: 10.32508/stdj.v18i2.1118
Published: 2015-06-30

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Copyright © 2015 by the author(s).

Copyright The Author(s) 2023. This article is published with open access by Vietnam National University, Ho Chi Minh city, Vietnam. This article is distributed under the terms of the Creative Commons Attribution License (CC-BY 4.0) which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited. 

Abstract

The paper examines the impact of factors belonging to banking system and their interaction with real and monetary shocks on economic volatility. Using panel data on 71 economies from 1998 - 2011, we provide evidence that the lower (higher) the bank competition is, the higher (lower) the impact of inflation (terms-of-trade) volatility on GDP growth volatility is. Banks with high shareholder equity ratios enjoy lower impact of inflation volatility on economic instability. Meanwhile, the extent of bank diversification in operations has no ability in adjusting the impact of the two sock types.

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