Purpose

The number of US commercial banks has declined by about 50% over the last two decades. This change could lead to a potential decline in competition and a potential increase in market power in the agricultural banking market. The focus of this study is to examine whether the risk of failure and the performance of agricultural banks has been affected by bank consolidations.

Design/methodology/approach

The impact of bank competition on performance and financial stability of agricultural banks is studied using a Lerner index as a measure of market power. A Z-score is constructed to measure bank stability. Similarly, the return on assets (net income to total assets ratio), return on equity (net income to the total equity ratio), agricultural loan ratio and agricultural loan volume are used as performance measures for agricultural banks. Two-way fixed effect regression models are estimated to measure the impact of competition on financial stability and performance.

Findings

Results indicate that bank competition has a U-shaped effect on the probability of default and an inverted U-shaped effect on volume and proportion of agricultural lending. There also exists evidence of a positive but non-linear effect of bank market power on the profitability of agricultural banks.

Originality/value

There is limited literature on the impact of bank competition on financial stability and performance of US agricultural banks. Agricultural banks hold more than 40% of US farm debt. A decrease in the number of banks or the level of competition in agricultural banking may cause an adverse effect on relationship lending. The key findings imply that bank regulatory strategies should focus on enhancing (reducing) competition in more (less) concentrated banking markets to improve the financial health and performance of agricultural banks.

中文翻译：

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美国农业银行业的竞争、业绩和金融稳定性

目的

在过去的二十年中，美国商业银行的数量减少了约 50%。这种变化可能导致农业银行市场竞争的潜在下降和市场力量的潜在增加。本研究的重点是检验农业银行倒闭风险和业绩是否受到银行合并的影响。

设计/方法/方法

使用勒纳指数作为市场力量的衡量标准，研究了银行竞争对农业银行业绩和金融稳定性的影响。甲ž -score被构造成测量银行稳定性。同样，资产回报率（净收入与总资产的比率）、股本回报率（净收入与总股本的比率）、农业贷款比率和农业贷款量被用作衡量农业银行的绩效指标。估计双向固定效应回归模型以衡量竞争对金融稳定性和绩效的影响。

发现

结果表明，银行竞争对违约概率呈U型效应，对农业贷款规模和比例呈倒U型效应。也有证据表明银行市场力量对农业银行的盈利能力有积极但非线性的影响。

原创性/价值

关于银行竞争对美国农业银行金融稳定性和业绩的影响的文献有限。农业银行持有超过 40% 的美国农业债务。银行数量减少或农业银行业竞争水平可能会对关系贷款产生不利影响。主要研究结果表明，银行监管战略应侧重于加强（减少）集中度较高（较少）的银行市场的竞争，以改善农业银行的财务状况和业绩。