Market Competition, Non-Interest Income and Risk-Taking of Small and Medium-Sized Banks

Abstract

ABSTRACT Taking the data of 61 small and medium-sized commercial banks in China from 2014 to 2021 as a research sample, this paper conducts an empirical study on the relationship between market competition and the risk-taking of small and medium-sized banks, and further considers the moderating role of economic policy uncertainty and non-interest business income. The results show that the intensification of market competition increases the risk-taking of small and medium-sized banks. Meanwhile, economic policy uncertainty dampens the positive effect of market competition on bank risk-taking, and commission income and other non-interest income have important mediating effects in the relationship between market competition and bank risk-taking.