The Effect of Marketing Costs, Bank Concentration and Competitiveness on Banking Stability: The Case of Selected Oil Exporting Countries

Subject Areas : Jounal of Marketing Management

mohamad kamal mazhar al yaser ¹ , hosein sharifi renani ² , ghasan taregh zaher almamori ³ , mostafa rajabi ⁴

1 - PhD student in Economics, Isfahan branch (Khorasgan), Islamic Azad University, Isfahan, Iran
2 - Associate Professor of Economics, Isfahan Branch (Khorasgan), Islamic Azad University, Isfahan, Iran
3 - Assistant Professor of Economics, Al Muthani University, Samawa, Iraq
4 - Assistant Professor of Economics, khomeinishahr Branch, Islamic Azad University, Isfahan, Iran.

Received: 2024-10-19 Accepted : 2024-11-23 Published : 2024-11-24

Keywords: Marketing Costs, Banking Concentration, Banking Competition, Banking Stability.,

Abstract :

Introduction: There is a lot of evidence that organizations are spending on marketing, but it seems that banks and financial institutions do not have a sufficient understanding of how to use it to achieve competitive advantage and banking stability. On the other hand, strategic orientations such as banking concentration and banking competitiveness can bring stability to banks and financial institutions. In this regard, the main goal of this research is to investigate the impact of marketing costs, concentration and bank competitiveness on banking stability.

Research method: The statistical population of this research is oil exporting countries. Accordingly, 17 OPEC member countries including Algeria, Iran, Iraq, Kuwait, Libya, Solomon Islands, Qatar, Saudi Arabia, United Arab Emirates, Ecuador, Angola, Venezuela, Nigeria, Gabon, Guinea, Congo and Indonesia during 2012. 2023 has been selected as the final research sample. The data analysis method is also based on the vector autoregression method with distribution breaks with the panel data approach (Panel ARDL).

Findings: The findings of the research showed that the index of marketing costs had a positive and significant effect on banking stability in the studied countries. In other words, increasing marketing costs in the banking sector can improve the stability of the banking sector by strengthening this sector in various aspects of customer relations and banking performance. Other findings showed that banks that operate in a more concentrated banking market tend to be more stable. Also, banks that operate in a more concentrated banking industry tend to be more stable.

Conclusion: Based on this, it is suggested to implement policies to encourage competition in the banking sector. This can be done by lowering barriers to entry, fostering innovation and ensuring a level playing field for all financial institutions. Also, the findings support the concentration-stability hypothesis and show that banks that operate in a more concentrated banking market tend to be more stable.

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