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Non-Linear Impact of ICT on Profitability of Commercial Banks in Vietnam

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  • Le Hoang Vinh
  • Ngo Van Toan
  • Pham Le Quang

Abstract

The aim of this article is to evaluate the nonlinear impact of ICT on the profitability of commercial banks in Vietnam and determine the ICT threshold for banks to gain additional profits from this investment. The research sample was selected by purposive sampling method, including 25 commercial banks in the period 2010-2020. The estimation results according to the 2-step system GMM indicate that ICT has a U-shaped nonlinear effect on profitability, and profitability will be lowest when the readiness index for ICT development and application reaches 0.6052 according to the derivative method, if this level is exceeded, ICT will have a positive impact on profitability and vice versa.

Suggested Citation

  • Le Hoang Vinh & Ngo Van Toan & Pham Le Quang, 2023. "Non-Linear Impact of ICT on Profitability of Commercial Banks in Vietnam," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 42-53.
    • Handle: RePEc:bas:econst:y:2023:i:4:p:42-53
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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