This study examines the influence of competition on the financial stability of the commercial banks of Association of Southeast Asian Nation (ASEAN) over the 1990 to 2014 period. Panzar-Rosse H-statistic, Lerner index and Herfindahl-Hirschman Index (HHI) are used as measures of competition, while Z-score, non-performing loan (NPL) ratio and equity ratio are used as measures of financial stability. Two-step system Generalized Method of Moments (GMM) estimates demonstrate that competition measured by H-statistic is positively related to Z-score and equity ratio, and negatively related to non-performing loan ratio. Conversely, market power measured by Lerner index is negatively related to Z-score and equity ratio and positively related to NPL ratio. These results strongly support the competition-stability view for ASEAN banks. We also capture the non-linear relationship between competition and financial stability by incorporating a quadratic term of competition in our models. The results show that the coefficient of the quadratic term of H-statistic is negative for the Z-score model given a positive coefficient of the linear term in the same model. These results support the non-linear relationship between competition and financial stability of the banking sector. The study contains significant policy implications for improving the financial stability of the commercial banks.
Strategically located at the crossroads of Asia, Malaysia has become one of the key players in the fast-growing and lucrative market for health care services in Asia. Medical travel across international boundaries has been made possible through affordable airfares and the favourable exchange rates of the Malaysian ringgit has contributed to the rise of the "medical tourism phenomenon" where medical travel is combined with visiting popular tourist destinations in Malaysia. Further, competitive medical fees and modern medical facilities have also made Malaysia a popular destination for medical tourists. Nevertheless, the increased number of foreign patients has opened up possibilities of Malaysian health care providers being subjected to malpractice claims and triggering a myriad of cross-border legal issues. Presently, there is no internationally accepted legal framework to regulate medical tourism and issues of legal redress in relation to unsatisfactory provision of treatment across international boundaries. The economic benefits of medical tourism must be based upon a solid legal regulatory framework and strong ethical standards as well as upon high-quality medical and health care services. It is therefore important to assess the existing legal framework affecting the development of medical tourism in Malaysia in order to explore the gaps, deficiencies and possibilities for legal and regulatory reform.
As growth potential in the U.S. market declines and regulatory constraints increase, providers of health-related services may look increasingly to international opportunities as a way to supplement the lost domestic market. In this article, critical factors bearing on the decision to compete in international markets are identified. Existing theories of multinational competition are expanded to provide a framework for analyzing international competition. Applied in the context of the proprietary hospital industry, the critical factors governing both the selection of foreign markets and mode of entry are proposed to be host country receptivity and market growth potential.