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Bank Concentration and Crisis

Authors:Thorsten Beck , Asli Demirguc-Kunt  and Ross Eric Levine
Topics:Financial Sector
Citation: 

Beck, Thorsten, Asli Demirguc-Kunt and Ross Levine, "Bank Concentration and Crises", Journal of Banking and Finance,2003.

Variables: 

Institutions
Regulatory restrictionsFinancial sector development
OwnershipEconomic development data

Variable name

Description and source
Bank Market Structure: 
ConcentrationA measure of the degree of concentration in the banking industry, calculated as the fraction of assets held by the three largest commercial banks in each country, averaged over the period 1995-99.   
Source: Fitch IBCA's Bankscope Database
Regulatory restrictions: 
Fraction of entry applications deniedA measure of the number of entry applications denied as a fraction of the number of applications from both domestic and foreign entities (ratio of survey questions 1.9.1 And 1.10.1 to 1.9 and 1.10) 
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Fraction of domestic entry applications deniedA measure of the number of domestic entry applications denied as a fraction of the number of  applications from domestic entities (ratio of survey questions 1.9.1 to 1.9) 
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Fraction of foreign entry applications deniedA measure of the number of foreign entry applications denied as a fraction of the number of  applications from foreign entities (ratio of survey questions 1.10.1 to 1.10) 
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Activity restrictionsA measure of a bank's ability to engage in the businesses of underwriting, insurance, and real estate, and of the regulatory effectiveness of banks to own shares in non-financial firms (sum of survey questions 4.1 through 4.4) 
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Banking freedomAn indicator of relative openness of banking and financial system, averaged over the period 1995-99:  specifically whether the foreign banks and financial services firms are able to operate freely, how difficult it s to open domestic banks and other financial services firms, how heavily regulated the financial system is, the presence of state-owned banks, whether the government influences allocation of credit, and whether banks are free to provide customers with insurance and invest in securities (and vice-versa).  The index ranges in value from 1 (very low) to 5 (very high), calculated as 6 minus the banking freedom index of the Heritage Foundation. 
Source: Heritage Foundation's Index of Economic FreedomBack to top
Ownership: 
State ownershipA measure of the degree of government ownership of banks, calculated as the fraction of the banking system's assets that is in banks that are 50% or more government owned (survey question 3.7)
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Foreign ownershipA measure of the degree of government ownership of banks, calculated as the fraction of the banking system's assets that is in banks that are 50% or more foreign owned (survey question 3.8) 
Source: Barth, Caprio, and Levine (2003, forthcoming in the JFI)
Institutions: 
Economic freedomA composite of 10 institutional factors determining economic freedom, averaged over the 1995-99:   trade policy, fiscal burden of government, government intervention in the economy, monetary policy, capital flows and foreign investment, banking and finance, wages and prices, property rights,  regulation, and black market activity.  The index ranges 1 to 5, with a high score signifying greater freedom (calculated 6 minus the economic freedom index of the Heritage Foundation). 
Source: Heritage Foundation's Index of Economic Freedom
KKZ indexA composite of six governance indicators (1998 data): voice and accountability, political stability, government effectiveness, regulatory quality, rule of law. And corruption.  Higher values correspond to better governance. 
Source: Kaufman and Kraay (2000/1)Back to top
Financial sector development: 
Private creditA broad measure of financial intermediary development.  Calculated as the value of credits by financial intermediaries to the private sector divided by GDP. 
Source: Beck, Demirguc-Kunt, and Levine (2000)
Total value tradedA measure of stock market development.  Calculated as the value of stocks traded divided by GDP. 
Source: Beck, Demirguc-Kunt, and Levine (2000)
Economic development data: 
GDP per capitaGDP per capita expressed in constant 1995 US dollars for period 1995-99.  
Source: World Development Indicators.
Economy sizeGDP expressed in constant 1995 US dollars for period 1995-99.  
Source: World Development Indicators.Back to top
Access to Dataset
  • Appendix (pdf file, 28kb)


  • Dataset (MS Excel file, 930kb)





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