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Bank Competition and Stability: Evidence from Rural Banks in Bali

Author

Listed:
  • Fridayana YUDIAATMAJA

    (Faculty of Economics and Business, Universitas Udayana, Bali, Indonesia)

  • IGB WIKSUANA

    (Faculty of Economics and Business, Universitas Udayana, Bali, Indonesia)

  • NLP WIAGUSTINI

    (Faculty of Economics and Business, Universitas Udayana, Bali, Indonesia)

  • IBG SEDANA

    (Faculty of Economics and Business, Universitas Udayana, Bali, Indonesia)

Abstract

The relationship between competition and stability is widely understood by researchers with two different perspectives, namely competition-fragility and competition-stability. A lot of research has been conducted regarding the relationship between competition and stability in the banking sector but has not specifically examined the stability of the classic model of rural banks. The purpose of this study was to empirically examine the effects of rural banks' competition and stability based on the aspects of capital, earning asset quality, profitability and liquidity. The indicators used in this study are adjusted to the characteristics of rural banks and existing regulations. The results of the study indicate that the competition variable has a significant positive effect on the stability of rural banks, and supports the view of competition stability.

Suggested Citation

  • Fridayana YUDIAATMAJA & IGB WIKSUANA & NLP WIAGUSTINI & IBG SEDANA, 2022. "Bank Competition and Stability: Evidence from Rural Banks in Bali," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 23(1), pages 48-59, June.
    • Handle: RePEc:rse:wpaper:v:23:y:2022:i:1:p:48-59
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    More about this item

    Keywords

    Banking Stability; Competition; Financial Crisis; Rural Banks;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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