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An empirical analysis of growth and consolidation in banking: a Markovian approach for the case of Russia

An empirical analysis of growth and consolidation in banking: a Markovian approach for the case... This paper represents an empirical research of the growth process in the Russian banking sector during 2004–2010 years. The growth process is modelled by Markov chains. Nine states were used to describe the growth process. Markov chain stationarity check revealed three homogeneous periods. The forecast, based on adequate robustness proof, has been provided for 1, 3 and 10 years ahead. It was revealed that the number of banks is expected to decrease almost two times, whereas total assets are envisaged to grow more than 2.5 times and the return on assets is unlikely to increase more than by 12% in 10 years by 2020. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Computational Economics and Econometrics Inderscience Publishers

An empirical analysis of growth and consolidation in banking: a Markovian approach for the case of Russia

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1757-1170
eISSN
1757-1189
DOI
10.1504/IJCEE.2014.060291
Publisher site
See Article on Publisher Site

Abstract

This paper represents an empirical research of the growth process in the Russian banking sector during 2004–2010 years. The growth process is modelled by Markov chains. Nine states were used to describe the growth process. Markov chain stationarity check revealed three homogeneous periods. The forecast, based on adequate robustness proof, has been provided for 1, 3 and 10 years ahead. It was revealed that the number of banks is expected to decrease almost two times, whereas total assets are envisaged to grow more than 2.5 times and the return on assets is unlikely to increase more than by 12% in 10 years by 2020.

Journal

International Journal of Computational Economics and EconometricsInderscience Publishers

Published: Jan 1, 2014

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