The role of competition as a mediator between financial liberalization and financial stability

Mohd Ariffin, Noraini and Ramly, Zulkufly and Muhamad Arifin, Nur Afizah and Hashim, Maryam Jameelah (2019) The role of competition as a mediator between financial liberalization and financial stability. Advances in Business Research International Journal. pp. 51-58.

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Abstract

The shift from financial repression to financial liberalization causes cross-border capital flows and brought dramatic changes to the financial sector. In this regard, the financial sectors, acts as financial intermediary which plays a significant role in mobilizing funds between surplus and deficit units. Furthermore, financial liberalization creates higher competition and could have negative impact towards financial stability due to excessive risk taking. This study’s research model focuses on examining the impact of competition on the relationship between financial liberalization and financial stability. This model was analyzed by using the PLS-SEM and it was found that the measurement model explains 19% of the substantial amount of variance in financial stability. Based on this finding, this study will theoretically contribute in extending the competition stability view and competition fragility view as determiners of financial stability. Based on the empirical results, it can be concluded that in the presence of competition, financial liberalization has a significant effect on financial stability.

Item Type:	Article (Journal)
Additional Information:	1616/89721
Uncontrolled Keywords:	Competition, Financial Liberalization, Financial Stability
Subjects:	H Social Sciences > HG Finance > HG1501 Banking H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Accounting Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Dr. Noraini Mohd. Ariffin
Date Deposited:	07 May 2021 11:12
Last Modified:	07 May 2021 11:12
URI:	http://irep.iium.edu.my/id/eprint/89721

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