Assessment Of Malaysia Banking Sector Competitivess Using Structure, Conduct And Performance (SCP) Paradigm
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Date
2014
Authors
Khoo, Wei Chieh
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Over the past decade, the issues of bank’s merger and acquisition have attracted the attention from government, central banks and researchers. Malaysia banking industry has undergone financial reforms during the 1980s and 1990s financial crisis which significantly metamorphosed the banking system. Structure conduct performance paradigm suggest that an industry market structure will affect a firm conducts and ultimately the performance of the firm. This study will research on the impact of Malaysia banking industry structure towards banks’ conduct and performance and in the other way round how Malaysia banking industry performance impacted Malaysia banking industry structure and banks’ conduct. In addition, Impact of banking industry structure and performance on banks’ conduct is studied as well. The empirical results show that bigger bank size will improve bank’s performance and higher concentration market structure will decrease bank performance. The empirical results also shows that as market concentration increase, bank size will increase and banks’ liquidity will decrease. The results is aligned to Bank Negara Malaysia plans of strengthening local banking structure through merger to increase bank size and decrease of market concentration by reducing foreign bank entry barrier stages by stages as Malaysia banks are more matured in their operation and performance.
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Keywords
banking sector , performance