Effects of Concentration on Stability of the Banking Sector : Evidence from Selected Arab Countries

The study continues in the same momentum of empirical works on the concentration-stability relationship of the banking sector by examining such a relationship for a panel of 15 Arab economies over the 2013-2019 period in the framework of dynamic panel data models and by controlling for auxiliary variables, namely the growth of the gross loan for the banking sector and economic growth. The findings show that the banking concentration has the power to influence the stability of the Arab banking sector, as it reflected positively on financial stability for the selected Arab economies over the period under study. They also reveal that the growth of the gross loan for the banking sector and the economic growth exert significantly and positive effects on financial stability. The study provides relevant policy recommendations for the policymakers to help them enhance the stability of the Arab banking sector, depending on the intrinsic features of each country