Mahathanaseth, Itthipong. 2011. Three Essays In Banking Sector Of Thailand. Doctoral Dissertation,
Cornell University.
This dissertation consists
of three essays. The first essay examines the cost efficiency and production
technology in the banking sector of Thailand using a stochastic frontier
approach. The empirical results indicate that banks with lower
Non-performing-loan to-total-loan ratio, higher equity-to-total-asset ratio,
higher liquid-asset-to-total-asset ratio, and more branches are likely to be
more efficient. The second essay investigates the degree of competition in the
banking industry using the new empirical industrial organization approach. The
empirical results indicate that, despite the Thailand government's efforts to
increase competition in the banking industry by relaxing restrictions on entry
to the market after the financial crisis, the oligopolistic degree of the
biggest four banks has intensified. The third essay links the results of the
first and second essays, cost efficiency and competition in the banking sector,
to the transmission mechanism of monetary policy in Thailand using Vector
Autoregression approach. The empirical results indicate that an unexpected
tightening monetary policy shock leads to higher financial costs in the banking
industry, forcing banks to compete more fiercely and operate more efficiently,
significantly helping strengthen the transmission of monetary policy. Hence,
the policy implication is that Thai government should exert more effort to
enhance efficiency and competition in the banking sector.
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