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Table 5 2SLS regression using 1–Predicted HHI as an instrument

From: Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

Dependent variable (1) ROA (2) ROE (3) NPL ratio (4) Cost (5) Market share
Panel A Second-stage
1–HHI −0.006a (0.003) − 0.082a (0.048) 1.327a (0.775) 0.024c (0.004) 0.355b (0.137)
Loan ratio 0.015c (0.002) 0.036a (0.019) 0.444 (0.319) 0.032c (0.002) 0.136b (0.078)
Asset ratio −0.006a (0.007) − 0.002 (0.001) − 0.086c (0.027) 0.000 (0.000) −4.533c (0.897)
Capital 0.006b (0.003) −0.301c (0.065) − 0.782 (0.755) 0.010c (0.004) − 0.313b (0.192)
Asset quality 0.001b (0.002) −0.004 (0.008) 0.036 (0.215) 0.000 (0.001) 1.389c (0.511)
GDP −1.984 (2.193) 13.998 (39.002) − 2793.267c (643.740) 0.829 (3.154) −62.621c (17.233)
Age −0.001 (0.001) 0.011c (0.002) − 0.011 (0.062) 0.000 (0.000) − 0.023 (0.010)
Size 54.743 (33.593) 733.750a (434.495) 21,350.632b (8308.440) 50.455 (40.844) 1.258c (0.411)
Constant 0.001 (0.003) −0.003 (0.044) 1.708a (0.999) − 0.010b (0.005) 0.349b (0.177)
 Year fixed effects Yes Yes Yes Yes Yes
 Bank fixed effects Yes Yes Yes Yes Yes
N 790 790 794 783 796
R2 0.717 0.599 0.454 0.705 0.971
Panel B: First-stage  
 1–Predicted HHI 0.655c (0.077) 0.655c (0.077) 0.652c (0.077) 0.659c (0.078) 0.658c (0.077)
Constant 0.541c (0.080) 0.541c (0.080) 0.542c (0.082) 0.535c (0.081) 0.533c (0.081)
  1. Notes. Standard errors are robust and reported in parentheses. a, b, and c indicate significance at 10%, 5%, and 1% levels, respectively