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Concentration and efficiency in the Vietnamese banking system between 1999 and 2009: A structural model approach

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  • 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: A structural model approach," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 21(3), pages 268-283, July.
  • Handle: RePEc:eme:jfrcpp:v:21:y:2013:i:3:p:268-283
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    Citations

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    Cited by:

    1. repec:eee:riibaf:v:41:y:2017:i:c:p:125-135 is not listed on IDEAS
    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. 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.
    5. 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.

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