IDEAS home Printed from https://ideas.repec.org/a/mth/ajfa88/v7y2015i2p161182.html

How do the Banking Systems of Vietnam, China and India Fare?

Author

Listed:
  • Thanh Pham Thien Nguyen

Abstract

Given that Vietnam, China and India are among the few remaining banking systems which have central bank dependence, state dominance, regulatory restrictions and gradual reforms towards liberalisation, this study examines cost, revenue and profit efficiency and stability of these banking systems. Using DEA Window Analysis, the study found that these banking systems achieved high efficiency levels, with generally increasing efficiency from 1995 to 2011. Cost efficiency was equally driven by technical and allocative efficiencies; revenue efficiency was driven by interest income efficiency more than by non-interest income efficiency; and profit efficiency was equally driven by cost and revenue efficiencies. Furthermore, state banks were found to be more efficient than private banks, but this efficiency gap declined over time. Compared to private banks, state banks appear to have been better at coping with the Asian financial crisis (AFC), but worse at facing the Global financial crisis (GFC). However, banking systems of Vietnam and China were slightly hit by the AFC, while China and India were slightly hit by the GFC.

Suggested Citation

  • Thanh Pham Thien Nguyen, 2015. "How do the Banking Systems of Vietnam, China and India Fare?," Asian Journal of Finance & Accounting, Macrothink Institute, vol. 7(2), pages 161182-1611, December.
    • Handle: RePEc:mth:ajfa88:v:7:y:2015:i:2:p:161182
    as

    Download full text from publisher

    File URL: https://www.macrothink.org/journal/index.php/ajfa/article/download/8296/6881
    Download Restriction: no
    File URL: https://www.macrothink.org/journal/index.php/ajfa/article/view/8296
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhu, Joe, 2000. "Multi-factor performance measure model with an application to Fortune 500 companies," European Journal of Operational Research, Elsevier, vol. 123(1), pages 105-124, May.
    2. Ray, Subhash C. & Das, Abhiman, 2010. "Distribution of cost and profit efficiency: Evidence from Indian banking," European Journal of Operational Research, Elsevier, vol. 201(1), pages 297-307, February.
    3. Altunbas, Yener & Evans, Lynne & Molyneux, Philip, 2001. "Bank Ownership and Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(4), pages 926-954, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dong, Yizhe & Girardone, Claudia & Kuo, Jing-Ming, 2017. "Governance, efficiency and risk taking in Chinese banking," The British Accounting Review, Elsevier, vol. 49(2), pages 211-229.
    2. Bijoy Rakshit, 2021. "Evaluating Profitability and Marketability Efficiency: A Case of Indian Commercial Banks," Global Business Review, International Management Institute, vol. 22(4), pages 977-995, August.
    3. Badunenko, Oleg & Kumbhakar, Subal C., 2017. "Economies of scale, technical change and persistent and time-varying cost efficiency in Indian banking: Do ownership, regulation and heterogeneity matter?," European Journal of Operational Research, Elsevier, vol. 260(2), pages 789-803.
    4. Thilakaweera, Bolanda Hewa & Harvie, Charles & Arjomandi, Amir, 2016. "Branch expansion and banking efficiency in Sri Lanka’s post‐conflict era," Journal of Asian Economics, Elsevier, vol. 47(C), pages 45-57.
    5. Wen-Min Lu & Qian Long Kweh & Chung-Wei Wang, 2021. "Integration and application of rough sets and data envelopment analysis for assessments of the investment trusts industry," Annals of Operations Research, Springer, vol. 296(1), pages 163-194, January.
    6. Koetter Michael, 2008. "An Assessment of Bank Merger Success in Germany," German Economic Review, De Gruyter, vol. 9(2), pages 232-264, May.
    7. Barros, Carlos Pestana & Williams, Jonathan, 2013. "The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 98-108.
    8. Yande Gong & Joe Zhu & Ya Chen & Wade D. Cook, 2018. "DEA as a tool for auditing: application to Chinese manufacturing industry with parallel network structures," Annals of Operations Research, Springer, vol. 263(1), pages 247-269, April.
    9. Goksel Armagan & Suleyman Nizam, 2012. "Productivity and efficiency scores of dairy farms: the case of Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(1), pages 351-358, January.
    10. Williams, Jonathan, 2004. "Determining management behaviour in European banking," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2427-2460, October.
    11. Tortosa-Ausina, Emili, 2004. "An alternative conditioning scheme to explain efficiency differentials in banking," Economics Letters, Elsevier, vol. 82(2), pages 147-155, February.
    12. Subhash C. Ray & Shilpa Sethia, 2022. "Nonparametric measurement of potential gains from mergers: an additive decomposition and application to Indian bank mergers," Journal of Productivity Analysis, Springer, vol. 57(2), pages 115-130, April.
    13. Dapeng Huang & Renhe Zhang & Zhiguo Huo & Fei Mao & Youhao E & Wei Zheng, 2012. "An assessment of multidimensional flood vulnerability at the provincial scale in China based on the DEA method," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(2), pages 1575-1586, November.
    14. Stefania P.S. Rossi & Markus Schwaiger & Gerhard Winkler, 2005. "Managerial Behavior and Cost/Profit Efficiency in the Banking Sectors of Central and Eastern European Countries," Working Papers 96, Oesterreichische Nationalbank (Austrian Central Bank).
    15. Fadzlan Sufian & Fakarudin Kamarudin, 2014. "The impact of ownership structure on bank productivity and efficiency: Evidence from semi-parametric Malmquist Productivity Index," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-27, December.
    16. Yu, Shasha & Lei, Ming & Deng, Honghui, 2023. "Evaluation to fixed-sum-outputs DMUs by non-oriented equilibrium efficient frontier DEA approach with Nash bargaining-based selection," Omega, Elsevier, vol. 115(C).
    17. Micco, Alejandro & Panizza, Ugo & Yañez, Mónica, 2004. "Bank Ownership and Performance," IDB Publications (Working Papers) 1544, Inter-American Development Bank.
    18. Diego A. Restrepo-Tobón & Subal C. Kumbhakar, 2013. "Profit efficiency of U.S. commercial banks: a decomposition," Documentos de Trabajo de Valor Público 10939, Universidad EAFIT.
    19. Xiao, Huijuan & Wang, Daoping & Qi, Yu & Shao, Shuai & Zhou, Ya & Shan, Yuli, 2021. "The governance-production nexus of eco-efficiency in Chinese resource-based cities: A two-stage network DEA approach," Energy Economics, Elsevier, vol. 101(C).
    20. Frank Schmielewski & Thomas Wein, 2015. "Are private banks the better banks? An insight into the principal–agent structure and risk-taking behavior of German banks," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(3), pages 518-540, July.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:ajfa88:v:7:y:2015:i:2:p:161182. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/ajfa .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.