Thao Ngoc Nguyen

Concentration and efficiency in the Vietnamese banking system between 1999 and 2009: A structural model approach

The purpose of this paper is to examine the degree of concentration and efficiency in the Vietnamese banking system using the structural model. We apply the concentration ratio (CR), Herfindahl-Hirschman Index (HHI) and concentration-profitability model based upon the Structure-Conduct-Performance (SCP) and Efficiency Hypothesis (EH) approaches to examine 48 Vietnamese commercial banks over the period 1999-2009. This is the first such study of the Vietnamese banking system. Our empirical results show that the Vietnamese banking industry has become substantially less concentrated, however large commercial banks still dominate the whole banking system. Further, our results do not support either the traditional Structure-Conduct-Performance or the Efficiency Hypothesis.

Market structure in the Vietnamese banking system : a non-structural approach

Purpose This paper aims to examine the market structure of Vietnam’s banking sector during 1999-2009, which is after the introduction of the two-tier banking system, using the non-structural (Panzar–Rosse) model. Design/methodology/approach The authors consider a more comprehensive range of specifications, in terms of a greater number of environmental covariates and different dependent variables, than in the previous applications of this model. Further, this is the first study that uses lagged input prices (to avoid endogeneity), excludes assets (to avoid specification bias) and includes a lagged dependent variable (to avoid dynamic panel bias) in such a study of the Vietnamese banking system. Findings The authors find that the Vietnamese banking system operates in monopoly. Originality/value The main contribution of this paper is to determine the market structure in the recent period after the Vietnamese banking system was transformed into a less centralised, two-tier system. This study is the first to uniquely identify the market structure of this developing economy’s banking system (using data only for Vietnam and not observations from other countries) in a post-transition period.

Performance of the Banking Sector of a Developing Country: A Non-Structural Model Using the Disequilibrium Approach

Based on the non-structural model – disequilibrium approach (Goddard and Wilson, 2009), this paper presents an empirical assessment of the degree of competition within the Vietnamese banking system from 1999 to 2009. We examine a greater number of environmental covariates and different dependent variables compared to previous applications of this model. Moreover, we use lagged input prices (to avoid endogeneity) and exclude assets (to avoid specification bias) in our models. The results indicate that the Vietnamese banking system operates in a monopolistic environment.