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The Impact of Digital Transformation on Performance: Evidence from Vietnamese Commercial Banks

Author

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  • Trang Doan Do

    (Faculty of Economics, Binh Duong University, No. 504 Binh Duong Boulevard, Hiep Thanh Ward, Thu Dau Mot City 820000, Vietnam)

  • Ha An Thi Pham

    (Faculty of Finance and Banking, Van Lang University, 69/68 Dang Thuy Tram Street, Ward 13, Binh Thanh District, Ho Chi Minh City 700000, Vietnam)

  • Eleftherios I. Thalassinos

    (Faculty of Maritime and Industrial Studies, University of Piraeus, 185-33 Piraeus, Greece and Faculty of Economics, Management and Accountancy, University of Malta, 2080 Msida, Malta)

  • Hoang Anh Le

    (Institute for Research Science and Banking Technology, Banking University HCMC, No. 36 Ton That Dam Street, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City 700000, Vietnam)

Abstract

The role of digital transformation in creating value for commercial banks has been interesting to researchers for a long time. While many commercial banks have significantly investigated digital transformation, researchers and managers have still met many difficulties examining the distribution of digital transformation to business performance. This paper aims to evaluate the impact of digital transformation on Vietnamese commercial banks’ performance by different sizes, from there proposing policy implications of digital transformation to improve the banking performance. To achieve this goal, we used a quantitative research method. Specifically, we applied the GMM system (SGMM) of Blundell and Bond for the data of 13 joint-stock commercial banks in Vietnam in the period from 2011 to 2019. Then Bayesian analysis is performed to test the robustness of the models estimated by the SGMM method. The result shows that the digital transformation has a positive impact on the performance of Vietnamese commercial banks. Besides, we also find that the larger the banks, the greater the positive impact of digital transformation on bank performance. Therefore, the efficiency of digital transformation depends on a bank scale.

Suggested Citation

  • Trang Doan Do & Ha An Thi Pham & Eleftherios I. Thalassinos & Hoang Anh Le, 2022. "The Impact of Digital Transformation on Performance: Evidence from Vietnamese Commercial Banks," JRFM, MDPI, vol. 15(1), pages 1-15, January.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:1:p:21-:d:719745
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    References listed on IDEAS

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    1. Bresciani, Stefano & Ferraris, Alberto & Del Giudice, Manlio, 2018. "The management of organizational ambidexterity through alliances in a new context of analysis: Internet of Things (IoT) smart city projects," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 331-338.
    2. Adnan Kasman, 2002. "Cost Efficiency, Scale Economies, and Technological Progress in Turkish Banking," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 2(1), pages 1-20.
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    Cited by:

    1. Piotr Rubaj, 2023. "Emerging Markets as Key Drivers of the Global Economy," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 431-445.
    2. Wenjun Li & Mu Zhang, 2024. "Digital Transformation, Absorptive Capacity and Enterprise ESG Performance: A Case Study of Strategic Emerging Industries," Sustainability, MDPI, vol. 16(12), pages 1-18, June.
    3. Yujie Zhang, 2024. "Exploring the Nexus: IT Capabilities, Digital Transformation, and Innovation in Traditional Manufacturing," International Journal of Science and Business, IJSAB International, vol. 39(1), pages 22-45.
    4. Riris Shanti & Hermanto Siregar & Nimmi Zulbainarni & Tony, 2023. "Role of Digital Transformation on Digital Business Model Banks," Sustainability, MDPI, vol. 15(23), pages 1-25, November.
    5. Assefa Belay, 2024. "Determinants of Bank Profitability on the Example of a Commercial Bank in Ethiopia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 121-138.
    6. Dominika Krol-Smetak & Ireneusz Miciula & Apoloniusz Kurylczyk & Malgorzata Chojnacka & Karolina Rogowska & Monika Rozycka, 2023. "Analysis of the Impact of Implemented IT Systems on the Economic Efficiency of Enterprises in the Construction Industry in the Context of Sustainable Development in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 901-915.
    7. Marek Ciekanowski & Slawomir Żurawski & Zbigniew Ciekanowski & Yury Pauliuchuk & Jan Boguski, 2023. "The Impact of Digitalization and the COVID-19 Pandemic on Information Security Management in the Enterprise," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 750-763.
    8. Ekaterina A. Potapova & Maxim O. Iskoskov & Natalia V. Mukhanova, 2022. "The Impact of Digitalization on Performance Indicators of Russian Commercial Banks in 2021," JRFM, MDPI, vol. 15(10), pages 1-20, October.
    9. Khattak, Mudeer Ahmed & Ali, Mohsin & Azmi, Wajahat & Rizvi, Syed Aun R., 2023. "Digital transformation, diversification and stability: What do we know about banks?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 122-132.
    10. Zbigniew Ciekanowski & Julia Nowicka & Slawomir Zurawski & Artur Czech & Malgorzata Zdunek, 2023. "Crisis Management and Crisis Situation in the Organization," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 339-353.
    11. Mishra, Deepa Bhatt & Haider, Imran & Gunasekaran, Angappa & Sakib, Md. Nazmus & Malik, Nishtha & Rana, Nripendra P., 2023. "“Better together”: Right blend of business strategy and digital transformation strategies," International Journal of Production Economics, Elsevier, vol. 266(C).
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