This study explores the transmission role of efficiency in the relationship between bank competition and stability consisting 88 commercial banks in four South Asian economies (Bangladesh, India, Pakistan and Sri Lanka) over the time period of 2012–2018. Both efficiency adjusted Lerner index and Boone indicator are used to measure the bank competition. The results using two-step system generalized method of moment propose that efficiency adjusted Lerner index and Boone indicator has significant negative influence on the stability of banks. The main findings are strongly in the favor of the postulate that efficiency plays a transmission role in the relationship between bank competition and stability. The results provide significant policy implications for policy makers regarding commercial bank's stability.

中文翻译：

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效率在银行业竞争与稳定的关系中是否起到传导作用？来自南亚经济体的新证据

本研究探讨了效率在 2012 年至 2018 年间由四个南亚经济体（孟加拉国、印度、巴基斯坦和斯里兰卡）的 88 家商业银行组成的银行竞争与稳定性之间关系中的传导作用。效率调整后的勒纳指数和布恩指标都被用来衡量银行的竞争程度。使用两步系统广义矩法的结果表明，效率调整后的勒纳指数和布恩指数对银行的稳定性有显着的负面影响。主要研究结果强烈支持效率在银行竞争与稳定之间的关系中起着传导作用的假设。结果为政策制定者提供了有关商业银行稳定性的重要政策含义。