Does competition affect disclosures in Indian banks? Evidence using panel data analysis

This study’s purpose is to empirically validate the claim of competition for disclosures in the banks in India. The panel data of 34 banks in India is collected from 2016 to 2019. A panel data model is estimated for both static and dynamic data. To verify how reliable the results are, the dynamic panel data model is assessed as well. The study’s main finding is that competition (Lerner Index, LI) significantly influences transparency and disclosures in the banks of India. A significant association is found when it is controlled for profitability (net-interest margin) and valuation (Tobin’s Q) in the banks. Studies between competition and the banks’ disclosures are scarce. Therefore, the current study’s findings are a novel contribution. The significant association of competition with banks’ disclosures, primarily through its control for profitability and valuation, adds considerable value to the extant lode of knowledge on the topic.