Investigating the effect of risk and competitiveness indicators of the banking industry on the index of economic growth and consumer inflation in iran’s economy

Document Type : Original Article

Authors
meysam fadaee vahed 1
mohammad Ali Dehghan Dehnavi 2
ali divandari 3
meysam amiry 2
1 Ph.D. Student in Financial Management, Allameh Tabatab'i University
2 Assistant Professor, Management Faculty, Allameh Tabataba'i University
3 Professor, Management Faculty, Allameh Tabataba'i University
Abstract
In recent years, the country's economy has faced a major challenge in the index of economic growth and inflation, and several factors have contributed to this challenge. Many theorists believe that banks and their risks have contributed significantly to these economic fluctuations. This study seeks to find an answer to the relationship between economic growth, inflation and risk and competitive banking indicators using the GMM model and quarterly data from the country's banks since 2007.
The results show that there is a significant relationship between economic growth and systemic risk indicators and Herfindahl-Hirschman. With the increase in systemic risk of the banking sector and the Herfindahl-Hirschman index, the country's economic growth index has decreased; Therefore, it can be concluded that controlling and reducing the systemic risk of the banking network is very important to increase economic growth. On the other hand, banks' competition in the country's economy is not useful and effective for economic growth and destructive competition dominates the country's banking network. Regarding inflation, the relationship between the competitiveness of the banking industry and inflation is positive and one of the inflationary factors in the country's economy is the competition of banks.
Keywords
Economic growth rate
Herfindal-Hirschman index
systemic risk
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