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Competition, Risk And Profitability In Banking System — Evidence From Vietnam

Author

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  • THI HIEN NGUYEN

    (Vietnam — Japan Institute for Human Resources Development, Foreign Trade University, Vietnam)

  • HA GIANG TRAN

    (University of Economics Ho Chi Minh City, Vietnam)

Abstract

The development in information technology results in a significant increase in bank competition. The question of whether increased competition improves bank profitability and risk reduction is important in many aspects. This paper analyzes the impact of competition on profitability and risk in the context of Vietnam using OLS estimator on data set of 37 Vietnamese commercial banks. The main results present that banks with a higher competition index tend to have higher profitability which is measured by ROE and NIM. In addition, our empirical results also show that banks tend to take on more risk when facing increased competition.

Suggested Citation

  • Thi Hien Nguyen & Ha Giang Tran, 2020. "Competition, Risk And Profitability In Banking System — Evidence From Vietnam," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(06), pages 1491-1505, December.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:06:n:s0217590820500137
    DOI: 10.1142/S0217590820500137
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    Cited by:

    1. Stapah @ Salleh, Maisyarah & Possumah, Bayu Taufiq & Ahmat, Nizam, 2021. "The Impact of Financing Contracts on the Profitability of Islamic Banks," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(3), pages 149-164.

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