Banking crisis and financial structure: A survival-time analysis

This paper applies non-parametric and parametric methods of survival analysis to the international bank crisis data. The empirical results suggest that concentration in the banking sector increases the survival time. Additionally, the results associated with survival functions indicate that the G-10 and non-G10 countries constitute two distinct groups of countries, where the non-G10 countries have a higher incidence of failure (bank crisis). The parametric survival time regressions (Weibull) confirm the possibility that the effects of the covariates on bank crises may have different dynamics in the G-10 and non-G10 countries. Subsequent analysis on bank concentration reveals the sources of the different dynamics associated with bank crises in developed and developing countries. The results suggest that higher bank concentration in developing countries may be related to the absence of competitive forces in the economic and political structure.