Under the traditional "competition-fragility" view, more bank competition erodes market power, decreases profit margins …, and results in reduced franchise value that encourages bank risk taking. Under the alternative "competition …-stability" view, more market power in the loan market may result in greater bank risk as the higher interest rates charged to loan …

The authors formulate and test hypotheses about the role of bank ownership types-foreign, state-owned, and private … hypotheses with regard to foreign banks. These banks tend to serve as the main bank for transparent firms, and firms with foreign … across bank ownership types. The data are also consistent with the hypothesis that firms with state-owned main banks are …