Market Structure, Competition, and the Profitability–Stability Trade-off in Bangladeshi Banking: A Unified Panel Analysis
This study of Bangladesh's banking sector (2001–2020) reveals a concave relationship between market concentration and profitability with an optimal threshold around CR3 ≈ 0.37, while demonstrating that both higher concentration and larger loan market shares undermine financial stability, suggesting a competition-fragility dynamic where moderate concentration boosts returns but excessive concentration erodes them and increases systemic risk.