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Concentration and efficiency in the Vietnamese banking system between 1999 and 2009

Author

Listed:
  • Thao Ngoc Nguyen
  • Chris Stewart

Abstract

Purpose - The purpose of this paper is to examine the degree of concentration and efficiency in the Vietnamese banking system using the structural model. Design/methodology/approach - The authors apply the concentration ratio (CR), Herfindahl‐Hirschman Index (HHI) and concentration‐profitability model based upon the Structure‐Conduct‐Performance (SCP) and Efficiency Hypothesis (EH) approaches to examine 48 Vietnamese commercial banks over the period 1999‐2009. Findings - The authors' empirical results show that the Vietnamese banking industry has become substantially less concentrated; however, large commercial banks still dominate the whole banking system. Further, their results do not support either the traditional Structure‐Conduct‐Performance or the Efficiency Hypothesis. Practical implications - The State Bank of Vietnam needs to have policies for restructuring the system and promoting competition in the banking sector of Vietnam. Originality/value - This is the first such study of the Vietnamese banking system.

Suggested Citation

  • Thao Ngoc Nguyen & Chris Stewart, 2013. "Concentration and efficiency in the Vietnamese banking system between 1999 and 2009," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 21(3), pages 268-283, July.
  • Handle: RePEc:eme:jfrcpp:v:21:y:2013:i:3:p:268-283
    DOI: 10.1108/JFRC-10-2012-0041
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    Citations

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    Cited by:

    1. Matousek, Roman & Nguyen, Thao Ngoc & Stewart, Chris, 2017. "Note on a non-structural model using the disequilibrium approach: Evidence from Vietnamese banks," Research in International Business and Finance, Elsevier, vol. 41(C), pages 125-135.
    2. Matousek, Roman & Nguyen, Thao Ngoc & Chris, Stewart, 2016. "Performance of the banking sector of a developing country: A non-structural model using the disequilibrium approach," Economics Discussion Papers 2016-2, School of Economics, Kingston University London.
    3. Stewart, Chris & Matousek, Roman & Nguyen, Thao Ngoc, 2016. "Efficiency in the Vietnamese banking system: A DEA double bootstrap approach," Research in International Business and Finance, Elsevier, vol. 36(C), pages 96-111.
    4. Le, Huong Nguyen Quynh & Nguyen, Thai Vu Hong & Schinckus, Christophe, 2021. "Bank efficiency, market structure and strategic interaction: Evidence from Vietnam," Research in International Business and Finance, Elsevier, vol. 56(C).
    5. Matousek, Roman & Nguyen, Thao Ngoc & Stewart, Chris, 2013. "Market structure in the banking sector: Evidence from a developing economy," Economics Discussion Papers 2013-1, School of Economics, Kingston University London.
    6. Abdul Latif Alhassan & Michael Lawer Tetteh & Freeman Owusu Brobbey, 2016. "Market power, efficiency and bank profitability: evidence from Ghana," Economic Change and Restructuring, Springer, vol. 49(1), pages 71-93, February.
    7. P. Thich D. & П. Тхих Д., 2017. "Детерминанты доходности банков: эмпирические данные из Вьетнама // Determinants of Banks’ Profitability: Empirical Evidence from Vietnam," Review of Business and Economics Studies // Review of Business and Economics Studies, Финансовый Университет // Financial University, vol. 5(4), pages 37-45.

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