Corporate Governance and Financial Stability: The Case of Commercial Banks in Vietnam

Thi Nhu Quynh Nguyen, Duc Trung Nguyen, Anh Le () and Dinh Luan Le
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Thi Nhu Quynh Nguyen: Faculty of Finance, Ho Chi Minh University of Banking, No. 36 Ton That Dam Street, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City 700000, Vietnam
Duc Trung Nguyen: Faculty of Banking, Ho Chi Minh University of Banking, No. 36 Ton That Dam Street, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City 700000, Vietnam
Dinh Luan Le: General Administration Office, Ho Chi Minh University of Banking, No. 36 Ton That Dam Street, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City 700000, Vietnam

JRFM, 2022, vol. 15, issue 11, 1-16

Abstract: Bank stability is a goal that bank managers aim for in addition to the goal of maximizing shareholder value. To achieve this goal, commercial banks have applied various solutions, including corporate governance because corporate governance plays an important role in the business activities of an enterprise in general as well as in that of a commercial bank in particular. The purpose of this paper is to investigate the impact of corporate governance on the stabilities of Vietnamese commercial banks in the period from 2009 to 2020. Using hand-collected data from 25 commercial banks in Vietnam, by system GMM estimation and the Bayesian Mixed-Effects approach, the paper identifies the characteristics of corporate governance affecting bank stability. Board size, women board members, and board members’ education have a positive impact, and dependent board and foreign board members have a negative impact on bank stability. Our findings show important evidence for an emerging country, such as Vietnam. From the empirical results, the authors suggest several recommendations to maintain and enhance bank stability in the future time.

Keywords: board characteristic; bank stability; system GMMs; Bayesian Mixed-Effects; COVID-19 (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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