Diversity and Bank Performance in Transition Economies: The Mediating Role of State Ownership

Doan Ngan Ha (doannganha@tdtu.edu.vn), Duong Dang Khoa (duongdangkhoa@tdtu.edu.vn) and Ha Pham
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Doan Ngan Ha: Ton Duc Thang University
Duong Dang Khoa: Ton Duc Thang University

A chapter in Disruptive Technology and Business Continuity, 2024, pp 285-295 from Springer

Abstract: Abstract This study examines the effect of diversification on commercial banks’ performance in Vietnam, a transitional economy. The diversification of commercial banks in Vietnam has problems due to the size of the economy and the macro-strategies that focus on state-owner involvement in business. By employing data from 37 Vietnamese commercial banks, the endogeneity problem is controlled; the study finds that diversification negatively affects bank performance. Interestingly, the existence of state ownership is evidence that banks should reduce their efforts to boost their performance. Moreover, the robustness shows that liquidity changes its effects on bank performance in terms of the involvement of state-owners. The findings can be evidence to policymakers to make a transparent and competitive banking sector in Vietnam.

Keywords: Diversification; Mediating role of state ownership; Performance; Transition economies (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-97-5452-6_22

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DOI: 10.1007/978-981-97-5452-6_22

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