Joint Effect of Banking Competition and Risk-Taking on Profitability: Evidence from ASEAN's Countries

摘要

Deregulation and financial reforms in the banking sector of ASEAN countries aim to foster a competitive environment in order to improve stability in the ASEAN banking sector. The joint effects of competition and risk-taking behavior on profitability in the banking sector have not been well studied in the literature. This research has implications for the importance of promoting competition in this region, while on the other hand, regulators need to take wise steps to reduce risk-taking behavior. This joint effect also shows the importance of competition in reducing risk-taking behavior, and this is evident through the interaction of both with significant positive effects on profitability.