IDEAS home Printed from https://ideas.repec.org/p/osf/osfxxx/9dcqp.html
   My bibliography  Save this paper

Government Ability, Bank-Specific Factors and Profitability - An insight from banking sector of Vietnam

Author

Listed:
  • Nguyen, V.C.
  • Nguyen, Thu Thuy
  • Nguyen, Huu Tinh

Abstract

To the best of our knowledge, a very few studies have focused on the effects of government ability on bank performance in developing and emerging countries. The aim of this work is to study the impact of government ability, bank-specific factors on profitability in the banking system in Vietnam. Using a panel data analysis in the period over 2014-2018, the study analyzes based on the methods of fixed, random effects, and pooled ordinary least squares. Data were collected from Vietnam’s Stock Exchange, General Statistics Office, and Worldwide Governance Indicators. Our results demonstrate that government ability has negatively affected bank efficiency while economic growth will not affect bank efficiency. In addition, the prime bank-specific factors that can significantly impact on bank efficiency are non-performing loan, loan-to-deposit ratio, loan loss reserves. A bank with a higher loan-to-deposit ratio can positively impact on the probability of a bank. In contrast to the risk, a bank with a greater risk as well as a higher level in non-performing loan in operation will negatively impact on its efficiency.

Suggested Citation

  • Nguyen, V.C. & Nguyen, Thu Thuy & Nguyen, Huu Tinh, 2020. "Government Ability, Bank-Specific Factors and Profitability - An insight from banking sector of Vietnam," OSF Preprints 9dcqp, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:9dcqp
    DOI: 10.31219/osf.io/9dcqp
    as

    Download full text from publisher

    File URL: https://osf.io/download/5eb2c7b1a2199500415d46d3/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/9dcqp?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Abdul Rashid & Sana Jabeen, 2016. "Analyzing performance determinants: Conventional versus Islamic Banks in Pakistan," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 16(2), pages 92-107, June.
    2. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    3. Ho, Po-Hsin & Chen, Hung-Kun & Lin, Chih-Yung & Chi, Che-Wei, 2016. "Does monitoring by the media improve the performance of government banks?," Journal of Financial Stability, Elsevier, vol. 22(C), pages 76-87.
    4. Fang, Jianchun & Lau, Chi-Keung Marco & Lu, Zhou & Tan, Yong & Zhang, Hua, 2019. "Bank performance in China: A Perspective from Bank efficiency, risk-taking and market competition," Pacific-Basin Finance Journal, Elsevier, vol. 56(C), pages 290-309.
    5. Ahmed Raza ul Mustafa & Riaz Hussain Ansari & Muhammad Umair Younis, 2012. "Does the Loan Loss Provision Affect the Banking Profitability in Case of Pakistan?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(7), pages 772-783, November.
    6. Brandao-Marques, Luis & Correa, Ricardo & Sapriza, Horacio, 2020. "Government support, regulation, and risk taking in the banking sector," Journal of Banking & Finance, Elsevier, vol. 112(C).
    7. Trong Nguyen Tran & Thu Thuy Nguyen & Van Chien Nguyen & Thi Thu Huong Vu, 2020. "Energy Consumption, Economic Growth and Trade Balance in East Asia: A Panel Data Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 443-449.
    8. Ahmed Raza ul Mustafa & Riaz Hussain Ansari & Muhammad Umair Younis, 2012. "Does the Loan Loss Provision Affect the Banking Profitability in Case of Pakistan?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(7), pages 772-783.
    9. Tran, T.N. & Nguyen, Thu Thuy & Nguyen, V.C. & Vu, T.T.H., 2020. "Energy Consumption, Economic Growth and Trade Balance in East Asia: A Panel Data Approach," OSF Preprints rd6kv, Center for Open Science.
    10. Martins, António Miguel & Serra, Ana Paula & Stevenson, Simon, 2019. "Determinants of real estate bank profitability," Research in International Business and Finance, Elsevier, vol. 49(C), pages 282-300.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bui, Thi Tam & Vu, T.T.H. & Le, Q.H. & Pham, Trong Luong & Nguyen, T.M.A. & Luu, T.D. & Le, Thi Thuy An & Nguyen, V.C., 2020. "Application of Project-based Learning for Primary Teachers - A New Direction in Professional Training at Pedagogical Universities and Colleges in Vietnam," OSF Preprints xg8tp, Center for Open Science.
    2. Nguyen, Thu Thuy & Tran, T.N. & Nguyen, V.C., 2020. "Oil price shocks against stock return of oil- and gas-related firms in the economic depression: A new evidence from a copula approach," OSF Preprints 4cm7b, Center for Open Science.
    3. Thu Thuy Nguyen & Van Chien Nguyen, 2021. "Financial Development and Renewables in Southeast Asian Countries—The Role of Organic Waste Materials," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    4. Sulaeman Rahman Nidar & Mokhamad Anwar & Ratna Komara & Layyinaturrobaniyah Layyinaturrobaniyah, 2020. "Determinant of regional development bank efficiency for their sustainability issues," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 1133-1145, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rusiadi Rusiadi & Muhammad Hidayat & Dewi Mahrani Rangkuty & Kiki Farida Ferine & Jumadil Saputra, 2024. "The Influence of Natural Resources, Energy Consumption, and Renewable Energy on Economic Growth in ASEAN Region Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 332-338, May.
    2. Nguyen, T.M.A. & Hoang, T.T. & Le, T.T.A. & Luu, T.D. & Le, Q.H. & Nguyen, T.T.H. & Nguyen, V.C., 2020. "Developing the competence of organizing experiential activities for pre-service teachers – The case in Vietnam," OSF Preprints 3hfsu, Center for Open Science.
    3. Zhen Shi & Shijiong Qin & Yung-ho Chiu & Xiaoying Tan & Xiaoli Miao, 2021. "The impact of gross domestic product on the financing and investment efficiency of China’s commercial banks," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-23, December.
    4. Shawuya Jigeer & Ekaterina Koroleva, 2023. "The Determinants of Profitability in the City Commercial Banks: Case of China," Risks, MDPI, vol. 11(3), pages 1-21, March.
    5. Faris Alshubiri, 2022. "The financial competition, concentration and structure of financial performance nexus in the financial sector of Oman," Economic Change and Restructuring, Springer, vol. 55(2), pages 681-714, May.
    6. Meriem Sebai & Omar Talbi, 2024. "A dynamic panel threshold regression on financial inclusion-financial stability nexus: Evidence from developing countries," Economics Bulletin, AccessEcon, vol. 44(3), pages 813-831.
    7. Zuriawati Zakaria & Noorfaiz Purhanudin & Ahmad Nazri Wahidudin, 2018. "The Role of Board Governance On Bank Performance," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 7(4), pages 38-50, October.
    8. Muhammad Fikry Hadi & Muhammad Hidayat & Dwi Widiarsih & Neng Murialti, 2021. "The Role of Electricity and Energy Consumption Influences Industrial Development between Regions in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 403-408.
    9. Liurong Pan & Asad Amin & Nian Zhu & Abbas Ali Chandio & Eric Yaw Naminse & Aadil Hameed Shah, 2022. "Exploring the Asymmetrical Influence of Economic Growth, Oil Price, Consumer Price Index and Industrial Production on the Trade Deficit in China," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
    10. Bui, Thi Tam & Vu, T.T.H. & Le, Q.H. & Pham, Trong Luong & Nguyen, T.M.A. & Luu, T.D. & Le, Thi Thuy An & Nguyen, V.C., 2020. "Application of Project-based Learning for Primary Teachers - A New Direction in Professional Training at Pedagogical Universities and Colleges in Vietnam," OSF Preprints xg8tp, Center for Open Science.
    11. Roy, Saktinil, 2022. "What drives the systemic banking crises in advanced economies?," Global Finance Journal, Elsevier, vol. 54(C).
    12. Campmas, Alexandra, 2020. "How do European banks portray the effect of policy interest rates and prudential behavior on profitability?," Research in International Business and Finance, Elsevier, vol. 51(C).
    13. Ekaterina Koroleva & Shawuya Jigeer & Anqi Miao & Angi Skhvediani, 2021. "Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China," Risks, MDPI, vol. 9(8), pages 1-19, August.
    14. Yadav, Aneet & Mahalik, Mantu Kumar, 2024. "Does renewable energy development reduce energy import dependency in emerging economies? Evidence from CS-ARDL and panel causality approach," Energy Economics, Elsevier, vol. 131(C).
    15. Sarfraz Hussain & Van Chien Nguyen & Quang Minh Nguyen & Huu Tinh Nguyen & Thu Thuy Nguyen, 2021. "Macroeconomic factors, working capital management, and firm performance—A static and dynamic panel analysis," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-14, December.
    16. Mohammad Alhadab & Saba Alsahawneh, 2016. "Loan Loss Provision and the Profitability of Commercial Banks: Evidence from Jordan," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(12), pages 242-242, November.
    17. Averi Chakrabarti & Karen A Grépin & Stéphane Helleringer, 2019. "The impact of supplementary immunization activities on routine vaccination coverage: An instrumental variable analysis in five low-income countries," PLOS ONE, Public Library of Science, vol. 14(2), pages 1-11, February.
    18. Harold Alderman & John Hoddinott & Bill Kinsey, 2006. "Long term consequences of early childhood malnutrition," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 450-474, July.
    19. Huh, Yesol & Kim, You Suk, 2023. "Cheapest-to-deliver pricing, optimal MBS securitization, and welfare implications," Journal of Financial Economics, Elsevier, vol. 150(1), pages 68-93.
    20. Ji Yan & Sally Brocksen, 2013. "Adolescent risk perception, substance use, and educational attainment," Journal of Risk Research, Taylor & Francis Journals, vol. 16(8), pages 1037-1055, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:osfxxx:9dcqp. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://osf.io/preprints/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.