The impact of market concentration on the performance of Vietnamese commercial banks

Abstract

This study explored the impact of market concentration on the performance of Vietnamese commercial banks. The study used observations from 26 Vietnamese commercial banks during the period 2009-2022 and employed the System GMM regression method. Return on assets (ROA) and return on equity (ROE) were used to measure bank performance. The findings indicate that market concentration based on deposit market share, lending market share, and institutional quality has a positive impact on the performance of Vietnamese commercial banks. Meanwhile, market concentration based on total asset market share has a negative impact on bank performance.
Keywords
market concentration level performance Vietnamese commercial banks

References

1.
Arellano, M. & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277-297.
2.
Bikker, J.A. & Haaf, K. (2002). Measures of Competition and Concentration in the Banking Industry: A Review of the Literature. Economic & Financial Modelling.
3.
Blundell, R. & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1), 115-143.
4.
Berger, A.N. & Hannan, T.H. (1989). The Price-Concentration Relationship in Banking. The Review of Economics and Statistics.
5.
Dickson, V.A. (1981). Conjectural Variation Elasticities and Concentration. Economics Letters, 7(3), 281-285.
6.
Goddard, J. et al. (2007). European Banking: An Overview. Journal of Banking & Finance, 31(7), 1911-1935.
7.
Kristina, K. (2016). Market Structure and Banking Sector Performance. Journal of Applied Economic Sciences, 11(4).
8.
Lartey, T. et al. (2023). Interbank Market Structure, Bank Conduct, and Performance: Evidence from the UK. Journal of Economic Behavior and Organization, 210, 1-25.
9.
Marfels, C. (1971). Absolute and Relative Measures of Concentration Reconsidered. Kyklos, 24(4), 753-766.
10.
Maudos, J. et al. (2002). Cost and Profit Efficiency in European Banks. Journal of International Financial Markets, Institutions and Money, 12, 33-55.
11.
Oyebola, F.E.M. & Zayyad, A.B. (2020). Market Structure, Institutional Quality and Bank Capital Ratios: Evidence from Developing Countries. European Journal of Management and Business Economics, 30(1), 92-107.
12.
Silalahi, T. et al. (2015). The Market Structure of the Bank, Its Performance, and the Macroprudential Policy. Bulletin of Monetary Economics and Banking, 18(1).