Document Type
Article
Source of Publication
Journal of Economic Asymmetries
Publication Date
11-1-2025
Abstract
This study examines the asymmetric relationship between competition and innovation in Eurozone banking, using data from the original 11 Economic and Monetary Union member states. Employing the technology gap ratio for innovation and the Lerner index and Boone indicator for competition, we find an inverted-U pattern: innovation initially rises with competition but declines beyond a threshold. Granger causality tests confirm bidirectional causality on the upward slope but none on the downward, highlighting nonlinearity. These findings suggest that moderate competition fosters innovation, while excessive rivalry stifles it. Policymakers should balance competition to maximize innovation without undermining long-term technological progress.
DOI Link
ISSN
Publisher
Elsevier BV
Volume
32
Disciplines
Business
Keywords
Bank, Boone indicator, Competition, Eurozone, Granger causality, Innovation, Lerner index, Stochastic frontier analysis, Technology gap ratio
Scopus ID
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Recommended Citation
Tee, Kenny; Syriopoulos, Konstantinos; Rubbaniy, Ghulame; and Salim, Amna, "Asymmetric relationship between competition and innovation: Evidence from banks in the Eurozone" (2025). All Works. 7403.
https://zuscholars.zu.ac.ae/works/7403
Indexed in Scopus
yes
Open Access
yes
Open Access Type
Hybrid: This publication is openly available in a subscription-based journal/series