Market structure and bank performance: A comprehensive picture of Vietnam
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Author(s)Thi Mai Phuong DuongLink to ORCID Index: https://orcid.org/0009-0001-5566-7326
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Van Dan DangLink to ORCID Index: https://orcid.org/0000-0001-5524-8765
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DOIhttp://dx.doi.org/10.21511/bbs.18(3).2023.07
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Article InfoVolume 18 2023, Issue #3, pp. 74-86
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- 314 Views
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175 Downloads
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Creative Commons Attribution 4.0 International License
In the context of the fact that the structure of the Vietnamese banking market has undergone many fluctuations, which has had an impact on banking activities, and the fact that many related studies have been carried out, but the answer is still limited and inconsistent, it is necessary to study the impact of the market structure on banking operations in Vietnam. The paper comprehensively examines the impact of market structure on various aspects of bank performance in Vietnam. The study uses three measures of the structure of the banking industry, namely, the total market share of the largest banks, the squared market share of all banks according to the Herfindahl-Hirshchman index, and the Lerner index on market power (inverse bank competition), to ensure the results are not dependent on any specific measure. The paper applies the two-step system generalized method of moments estimator to conduct regression analysis for a sample of 30 banks from 2007 to 2021. All obtained estimates generally show positive effects on bank performance due to greater market power and higher banking concentration. Concretely, more market power and greater concentration improve bank asset quality, management efficiency, bank profitability, and lending capacity. Overall, the findings of this paper all support the bright side of less competition and more concentration, which is essential to derive policy implications related to supervising competitive environments and stimulating consolidated financial systems.
Acknowledgment
This study is part of Thi Mai Phuong Duong’s PhD dissertation at the Ho Chi Minh University of Banking under the supervision of Van Dan Dang.
- Keywords
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JEL Classification (Paper profile tab)G21, G28
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References40
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Tables8
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Figures0
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- Table 1. Summary statistics of all variables
- Table 2. Market structure and non-performing loans
- Table 3. Market structure and loan loss provisions
- Table 4. Market structure and bank efficiency by non-interest expenses
- Table 5. Market structure and bank efficiency by operating expenses
- Table 6. Market structure and bank profitability by ROA
- Table 7. Market structure and bank profitability by ROE
- Table 8. Market structure and bank loan growth
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Syahyunan , Iskandar Muda ,
Hasan Sakti Siregar ,
Isfenti Sadalia ,
Gerry Chandra
doi: http://dx.doi.org/10.21511/bbs.12(4).2017.05
Banks and Bank Systems Volume 12, 2017 Issue #4 pp. 56-64 Views: 1201 Downloads: 195 TO CITE АНОТАЦІЯThe purpose of this study is to examine the effect of market power and income diversification on the General Bank stability in Indonesia. This research uses a data sample of 20 general banks listed on the Indonesia Stock Exchange for the period of 2011–2014. Data analysis technique used is Multiple Linear Regression. It can be concluded simultaneously that market power and revenue diversification have significant effect on bank stability and, partially, market power has a positive and significant effect on a bank stability. Income diversification has a positive non-significant effect on bank stability.
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The financial soundness of the Palestinian banking sector: an empirical analysis using the CAMEL system
Mohammed Т. Abusharbeh
doi: http://dx.doi.org/10.21511/bbs.15(1).2020.09
Banks and Bank Systems Volume 15, 2020 Issue #1 pp. 85-97 Views: 1070 Downloads: 371 TO CITE АНОТАЦІЯThe purpose of this article is to evaluate the financial soundness of commercial banks listed on the Palestine Exchange using the CAMEL rating system. A content analysis, composite rating, and a one sample t-test are applied to a sample of six local banks operating in Palestine. Secondary data were obtained from the financial statements of the banks for the period of 2007–2017 in order to conduct the research and evaluate their financial performance. The empirical test has shown that Palestinian banks adhere to the Basel Committee standards in terms of capital adequacy and that they display stability in terms of profitability and liquidity. However, the paper concludes that the operational efficiency of the banks being evaluated is “fairly managed”. Finally, the findings indicate significant differences amongst Palestinian banks in terms of performance, assessed using the CAMEL rating system. This paper suggests that the listed Palestinian banks should focus on long-term investments rather than short-term ones, and monitor their risk management practices to increase their profits and move towards sustainability and growth.
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The impact of foreign direct investment inflows on nonperforming loans: the case of UAE
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