Effects of ownership structure on bank performance: evidence from Vietnamese banking sector

This paper examines the effects of ownership structure, focusing on state-ownership and foreign-ownership, on performance of selected Vietnamese bank. The panel data of 23 Vietnamese banks is statistically tested and result suggests that state-ownership negatively affects bank performance. This is consistent with existing literature (La Porta et al., 2002; Berger et al., 2005; Lin and Zhang, 2009; Chen et al., 2009). This, however, shows deviation from findings in neighbour countries like Taiwan and China. On the issue of foreign ownership, the evidence is not steady and sufficient to support the notion that foreign owned banks generally outperform domestic banks. This contradicts with existing studies by Bonin et al. (2005) and Lin and Zhang (2009). A possible reason for this is the presence of stringent barriers and regulations by the Vietnamese Government for foreign banks in Vietnam.