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

Thao Ngoc Nguyen and Chris Stewart

Journal of Financial Regulation and Compliance, 2013, vol. 21, issue 3, 268-283

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.

Keywords: Banking; Concentration; Efficiency; Structural model; Herfindahl‐Hirschman Index; Vietnam (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:v:21:y:2013:i:3:p:268-283

DOI: 10.1108/JFRC-10-2012-0041

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