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http://dx.doi.org/10.13106/jafeb.2020.vol7.no11.779

An Analysis of Vietnamese Bank Productivity Change in the Time of Restructuring  

TO, Tha Hien (Political Economy Faculty, Le Quy Don Technical University)
LE, Phuong Thanh (Faculty of Business and Finance, Vietnam Maritime University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.11, 2020 , pp. 779-788 More about this Journal
Abstract
Commercial banks play an important role as the main source of funding in the transition process of Vietnam as a market economy. As a result, enhancing the efficiency and productivity of Vietnamese banks can decrease the lending cost for individuals and enterprises. This study is to measure and analyze the productivity change of Vietnamese banking system in different ownership cohorts and sources of this change during the period of restructuring (2011-2019). The Hicks-Moorsteen total factor productivity index is utilised to measure the productivity change and to identify the sources of this change. For an empirical analysis, the data of 28 Vietnamese commercial banks from 2011 to 2018 is collected from their financial statements including balance sheets and income statements. The results show an increase of Vietnamese bank productivity due to the technological progress. While foreign and joint-venture banks are the most advanced cohort, state-owned banks have the lowest rate of productivity growth. The restructuring program negatively impacts scale efficiency and this measure attributes to a decline in the overall efficiency of the banks. We also found that state-owned commercial banks are the most efficient group in the sense that they can achieve the maximal level of revenue from a given amount of expense.
Keywords
Total Factor Productivity; Hicks-Moorsteen Index; Bank Restructuring; Vietnam;
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Times Cited By KSCI : 6  (Citation Analysis)
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